Retire With Purpose - The Retirement Podcast

508: More Control, Less Surprise: A Real Retirement Tax Wake-Up Call

4 snips
Jul 4, 2025
What's the biggest surprise in retirement? Fritz Gilbert shares his unexpected challenges with Roth conversions and the impact on his finances. Delve into why planning ahead is crucial, as waiting may lead to more taxes and complications. Discover how strategic conversions can reduce required minimum distributions, Medicare premiums, and even benefits for heirs. This episode emphasizes the importance of proactive tax strategies to navigate uncertainties and ensure a smoother financial journey in retirement.
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ANECDOTE

Fritz's 401k Retirement Story

  • Fritz Gilbert saved aggressively in his 401k from age 22 and retired at 55 comfortably.
  • His experience shows 401ks can be valuable but require careful strategy to avoid surprises.
INSIGHT

Roth Conversions Take Time

  • Roth conversions may not reduce tax-deferred balances quickly due to compound returns.
  • Managing conversions requires a long-term view beyond just immediate balance changes.
ADVICE

Start Roth Conversions Early

  • Start Roth conversions before retirement to use your lower income years effectively.
  • Don't wait until retired, as early conversion opportunities can yield better tax control.
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