Ramsey Everyday Millionaires Should We Convert to a Roth or Leave It for the Kids to Inherit?
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Sep 24, 2025 A caller grapples with whether to convert $3M in traditional IRAs to Roths or let his children inherit them. The host shares insights on how Roth conversions can eliminate required minimum distributions and long-term tax burdens. They discuss the tax implications of inherited IRAs under new rules, emphasizing the importance of using after-tax savings for conversions. Paying taxes now might sting, but it protects heirs from larger future tax hits. Finally, the host highlights that there are no annual conversion limits, urging proactive financial planning.
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Converted Early By Accident
- Dave Ramsey accidentally converted his retirement accounts to Roth early and describes it as a brilliant move.
- He did it for tax-free growth and converted whenever a traditional account appeared.
Convert To Avoid RMDs
- Do convert traditional IRA funds to Roth to avoid required minimum distributions at age 73.
- Avoid forced taxable withdrawals that increase your taxable income in retirement.
Convert To Protect Heirs
- Do convert traditional IRAs to Roth to prevent heirs from facing a 10-year taxable payout under the SECURE Act.
- Pay the conversion taxes now and secure tax-free inheritance for your children.