What Is a Roth Conversion — And How Can You Do It Wrong?

About this episode

Shari Rash explains the complexities and potential pitfalls of Roth conversions in retirement planning.

Roth conversions sound smart. Tax-free growth, tax-free withdrawals later, more flexibility in retirement — what’s not to like? Well… the tax bill today. That part. In this episode, Shari Rash, founder of GWA Wealth, breaks down what a Roth conversion actually is, how it works, and why “tax-free later” does not mean “free today.” A Roth conversion can be a powerful planning tool, but it can also backfire if you convert too much, do it in the wrong year, ignore the pro-rata rule, forget about Medicare premiums or other income-based thresholds, or assume you can undo it later. Shari explains the difference between a Roth contribution, a Roth conversion, and a backdoor Roth, why the conversion amount usually gets added to your taxable income for the year, and why a large pre-tax retirement balance usually means you need a better plan — not a bigger conversion. You’ll hear: What a Roth conversion is and how it differs from a Roth contribution Why the conversion amount is not the tax bill, but may be taxable income How converting too much in one year can create a bigger tax bill than expected Why the pro-rata rule can make a backdoor Roth less clean than it sounds Why outside cash to…

People in this episode

Host: Shari Rash

Topics covered

• Roth conversion
• tax planning
• retirement
• financial strategy
• tax implications

Keywords

• Roth conversion
• tax-free growth
• taxable income
• pro-rata rule
• Medicare premiums

Mentioned in this episode

Organizations: GWA Wealth

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