Great video Ari!. Since due to asset location many may have mostly or only bonds in their IRA, wouldn’t this avoid a significant drop in your pre-tax balance, which would not allow you to take advantage of a market drawdown to do Roth conversions (other than years like 2022 when bonds went down significantly)? Would you recommend to keep some equities in your IRA to convert during drawdowns (which could backfire if the market goes up)? Thanks again for the great content!
So, hoping for the market to drop in order to do the conversion or just taking advantage of when that does happen? With the recent election the markets have gone up so do we wait (hope for) the market to go lower or just bite the bullet and go 'all in'? love the show and your insights =)
always look for an upside. down market while working... you are buying more equities for the money as you invest in a down market. same thing with dividend paying stocks getting reinvested at lower valuations. i have a large position in berkshire hathaway for years and when there's a down market i hope it gives them a chance to deploy that cash hoard. for roth conversions, you are converting more shares for the same amount of money. i wouldn't just wait for a down market though as time in the market is what matters, so the earlier the conversion the more time for the money to grow tax free. just convert more if the market goes down if you still have it within your cobversion budget
Wait, I am confused... when markets are down and you're using a dynamic withdrawal strategy, wouldn't you be taking a bit less money to actually cover your expenses (e.g. "Guardrails" or other non-static withdrawal strategy)? Then if you do a Roth conversion, you're just making your income higher on paper and paying taxes on it while you're also living on less? Like is that just a "Cauliflower" moment, living on less in a down year while also shelling out for taxes so you can get into a good position with your Roth? Just making sure I understand...
S&P500 is up over 30% in the last year, NASDAQ 32%. Inflation is at 2.4%, below the long term 3.2% average, and unemployment is at 4.1%, compared to a 5.6% long-term average. Rocky?
Great stuff! Thanks!
SO helpful. Thank you!
My pleasure!
Great video Ari!. Since due to asset location many may have mostly or only bonds in their IRA, wouldn’t this avoid a significant drop in your pre-tax balance, which would not allow you to take advantage of a market drawdown to do Roth conversions (other than years like 2022 when bonds went down significantly)? Would you recommend to keep some equities in your IRA to convert during drawdowns (which could backfire if the market goes up)? Thanks again for the great content!
So, hoping for the market to drop in order to do the conversion or just taking advantage of when that does happen? With the recent election the markets have gone up so do we wait (hope for) the market to go lower or just bite the bullet and go 'all in'? love the show and your insights =)
Are you able to do ROTH conversions before age 59.5? Are there other restrictions as to when you can do different things??
Yes. Any age.
always look for an upside.
down market while working... you are buying more equities for the money as you invest in a down market. same thing with dividend paying stocks getting reinvested at lower valuations. i have a large position in berkshire hathaway for years and when there's a down market i hope it gives them a chance to deploy that cash hoard. for roth conversions, you are converting more shares for the same amount of money. i wouldn't just wait for a down market though as time in the market is what matters, so the earlier the conversion the more time for the money to grow tax free. just convert more if the market goes down if you still have it within your cobversion budget
Wait, I am confused... when markets are down and you're using a dynamic withdrawal strategy, wouldn't you be taking a bit less money to actually cover your expenses (e.g. "Guardrails" or other non-static withdrawal strategy)? Then if you do a Roth conversion, you're just making your income higher on paper and paying taxes on it while you're also living on less? Like is that just a "Cauliflower" moment, living on less in a down year while also shelling out for taxes so you can get into a good position with your Roth? Just making sure I understand...
Yes. Eat more cauliflower while markets at down, spend less in that year, have more income on paper, and you’ll thank me years later.
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The markets are pretty rocky these days, aren’t they? Makes me nervous about how this will all affect retirement accounts
When haven’t they been, it’s the market
S&P500 is up over 30% in the last year, NASDAQ 32%. Inflation is at 2.4%, below the long term 3.2% average, and unemployment is at 4.1%, compared to a 5.6% long-term average. Rocky?
Lucky me. All my money is Roth already. So when I become a millionaire it will be a Tax Free Millionaire 🎉🎉🕺🏾🕺🏾🕺🏾