Retirement Starts Today Roth Conversions after One Big Beautiful Bill
Sep 29, 2025
Dive into the complexities of Roth conversions under new tax laws with insights from Ed Slott, emphasizing the importance of maximizing low tax brackets. Discover how new income caps complicate these conversions and the impact of the senior bonus deduction. Explore the pros and cons of moving companies to semi-annual reporting, from cost reduction to concerns about transparency. Learn practical strategies for annual conversion scenarios and why sticking to core retirement practices is key, regardless of reporting frequency.
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Roth Conversions Still Make Sense
- Roth conversions remain valuable: pay tax now to reduce lifetime taxes and RMDs later.
- New tax breaks create income cliffs that complicate how much to convert each year.
Senior Deduction Creates A New Cliff
- A new $6,000 senior deduction phases out starting at $75,000 single and $150,000 married.
- Small Roth conversions can inadvertently eliminate that deduction, changing the conversion calculus.
Run Two Conversion Scenarios
- Run side-by-side tax scenarios before converting to compare keeping senior deductions vs larger Roth conversions.
- Use tax software or an advisor to choose the conversion level that fits lifetime taxes and RMD concerns.