13 Roth Conversion Windows You CAN'T Afford To Miss

And obviously just to understand what is a Roth conversion? Well, obviously I'm sure you know what that is by watching this YouTube channel and by watching this video, but this is simply when you move your tax deferred investments over to a tax-free, oftentimes a Roth IRA in that instance.

And so if that's the case, you are gonna have to pay taxes on that money now.

And so often what you're gonna see with this situation is it's all gonna come down to what is your tax rates now versus what is your tax rates later.

That is how we determine the best window of time.

And so basically what I'm gonna talk through with all 13 of these, if I can give you a common theme is, you're gonna see that often in each of these that your tax bracket or your tax rates may likely be lower during that time in each of these opportunities than what it could be expected to be in the future.

So that is really the golden rule with Roth conversions.

If you do expect your tax rates to be lower in the future, then now you should likely not do a Roth conversion.

Now there's some things I'm gonna prove that point wrong specifically here today, but that is a common theme that we wanna make sure we have front of mind when making this decision.

If I can pay now at 20%, that's probably gonna be worthwhile versus paying later at 30%.

If I would pay now at 40% or later at 10%, obviously we would not wanna do a Roth conversion and we'd like to wait till the future.

So that's the main theme that we wanna think about.

So let's get into the first one.

This one's a common one.

This one's well known.

It's simply retiring early.

We know that when we retire early, we'll have an opportunity with less income from our work and that will provide us more of a window to take advantage of those lower tax brackets during that period of time.

Now there's a few things I'll talk about throughout the video today that prove this one wrong as well, but this is typically the general time when a lot of people like to expedite their Roth conversions where we see a big opportunity for success there.

Now the second opportunity time, let's say you retired early and then let's say that you're not beginning your pension yet.

Maybe you have an option to wait till 65 to get your pension and you get a higher amount to do that, rather than taking it today, maybe when you retired at 57.

And so that gives you an eight-year window of opportunity to really do Roth conversions and replacement of that pension so that when that pension comes in, you won't have to take out as much from your investments.

You'll have a higher amount to live on, but also you may be able to have more in your Roth.

And so when your pension does start, you could take from the Roth if you want extra income and your income could be the same at that situation.

So So ultimately, those are a lot of things to think about as far as what is that income going to be in the future and what is that pension amount is going to be.

But this one can be a really good one to think about.

We do know with a lot of employers, they will not allow you to delay it.