Why Wealthy Retirees Are Ditching Roth Conversions

Ready for a custom strategy to retire early (yes, it's free)? Start here ⬇️ → https://learn.rootfinancial.com/c6e81d Roth conversions are not a default move. For many people they make sense. For others, the same analysis that appears to justify conversions actually points to a different decision entirely. In this video, Ari makes one argument clearly: before you decide how much to convert and when, you need to answer two questions first. How much do you want to spend in retirement? And could you retire earlier than you planned? Ari runs through a case study where the software initially shows significant value from Roth conversions at the 22% bracket. Then he changes one thing: the monthly spending assumption. With higher planned spending, the conversion value drops. With earlier retirement and higher spending combined, it drops to zero. The software is not changing its logic. The inputs are changing, and the inputs reflect a life, not just a portfolio balance. The reason conversions create value is tax arbitrage. You pay taxes now, in a low bracket, to avoid paying more later when Social Security and required minimum distributions push your income higher. But if you plan to spend enough in retirement that your bracket stays elevated throughout, that gap narrows. And if you spend down the portfolio more aggressively by retiring earlier, the projected RMD shrinks, and so does the problem conversions were supposed to solve. The order of operations matters. Start with how much you actually want to spend. Then look at when you could realistically retire. Then run the conversion analysis. In many cases the right answer is still to convert, just less aggressively. In some cases the right answer is to spend more and retire sooner instead. The sign of a good plan is a life well lived, not the largest possible tax-free balance at death. Find out when you can retire early and run what-if scenarios ⬇️ → https://ari-taublieb.mykajabi.com/ear... Ari Taublieb, CFP®, MBA, is the Chief Growth Officer of Root Financial Partners and host of the Early Retirement Podcast. –––––––––––––––––––––––––––––– Time Stamp 00:00 - Why Everyone Assumes They Need Roth Conversions 01:29 - The Full Tax Planning Checklist 02:51 - Testing The 22% Tax Bracket 05:05 - Why Spending Comes Before The Roth Decision 05:39 - Understanding Tax Arbitrage 06:41 - Final Thoughts & Disclaimer INSTAGRAM - Instagram: earlyretirementari What video topic would you like to see discussed in a future video? Ari Taublieb, CFP®, MBA, is the Chief Growth Officer of Root Financial Partners and host of the Early Retirement Podcast. ––––––––––––––––––––––––––––– Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation. The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal. Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.