Jill on Money with Jill Schlesinger Roth Conversion Strategy
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Dec 19, 2025 Rich, a retired caller, dives into the world of Roth conversions and retirement planning. He discusses his current financial situation, including pensions and Social Security. Jill helps him navigate the tricky waters of converting traditional IRAs before RMDs, emphasizing the importance of timing and tax brackets. They explore the strategy of maxing out current brackets and using brokerage funds for tax payments. Rich gains insights on partial conversions and the importance of coordinating with financial advisers to optimize his retirement income.
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Delay Social Security To Optimize Conversions
- Delay claiming Social Security and use brokerage funds to pay Roth conversion taxes to keep taxable income lower.
- This approach lets you convert more into Roths before Social Security inflates your ordinary income and tax bracket.
Roth Inheritances Simplify Heirs' Taxes
- Inherited Roths provide heirs tax-free distributions and reduce heirs' future taxable RMDs from traditional accounts.
- Converting now can create a cleaner, tax-free legacy for your children compared with leaving large traditional IRAs.
Convert Gradually Before RMDs
- Convert traditional IRA funds over several years before required minimum distributions to control marginal tax rates.
- Aim to reduce traditional assets to a more manageable level (e.g., ~$500k–$600k) while locking in the tax payment.