Podcast Summary: "Good Time to Increase Roth Conversions?" Jill on Money with Jill Schlesinger – April 17, 2025

Introduction

In this episode of Jill on Money with Jill Schlesinger, host Jill Schlesinger delves into the timely and often complex topic of Roth conversions amidst current economic uncertainties. Joined by her executive producer Mark, Jill addresses listener concerns, providing clear, actionable advice without the financial jargon. The episode focuses on whether now is an opportune moment to increase Roth conversions, especially in a fluctuating market.

Listener Questions & Discussions

1. Marcia's Concern: "Tanking Economy" [02:00]

   Listener Profile: Marcia, 75 years old, recently retired, expresses anxiety about the economy's downturn and its impact on her financial security.

   Jill's Response:

   • Assess Income Sources: "Focus on where is your money coming from? Are you getting Social Security? Do you have money in the bank? Is that paying for your needs?" [02:45]
   • Investment Allocation: Emphasizes the importance of a balanced investment portfolio and reassures that if investments are a small portion of total assets, market noise should have minimal impact.
   • Action Plan: Encourages Marcia to reach out for personalized assistance if her investments are overly risky.

2. Natalie's Question: "Good Time to Increase Roth Conversions?" [03:30]

   Listener Profile: Natalie has been converting the top of the 12% married filing jointly bracket annually and is contemplating increasing her conversions during the current market downturn.

   Jill's Analysis:

   • Strategic Timing: Highlights Natalie's proactive approach to Roth conversions, especially taking advantage of lower market valuations for tax-free growth.
   • Mark's Input [04:38]: "This is one of the things that we spoke about recently. You know, times like this, there's usually some opportunities and this is one of them."
   • Jill's Support: "I love this idea… Make sure you've got the money to pay for it outside of retirement." [04:45]
   • Recommendation: Suggests making an initial pass at conversions earlier in the year while the market is low, aligning with Natalie's optimistic outlook on market rebound.

3. Brian's Concern: Investment Strategy for Retiree [05:10]

   Listener Profile: Brian, 65 years old, retired with a $550,000 401k, $3,000 monthly from Social Security and pension, paid-off house and cars, no debt.

   Jill's Response:

   • Investment Review: Advises Brian to review his 401k allocation to ensure it aligns with his long-term goals and risk tolerance.
   • RMD Considerations: Notes that Brian is not yet required to take distributions, giving him time to strategize.

4. Letter N's Question: "High 401k Balance and RMD Concerns" [06:15]

   Listener Profile: An individual with a significantly increased 401k balance at year-end 2024, leading to surprisingly high Required Minimum Distributions (RMDs).

   Question: "If my 401k balance drops by a lot by the time my RMD is due, should I take it early to avoid insufficient funds?"

   Mark's Reassurance [07:53]: "There's no way… I don't know any of the balances, but if this account was at an all-time high and I can't imagine it's going to zero."

   Jill's Advice:

   • Encourages sticking to the original RMD schedule unless there are specific reasons to adjust.
   • Suggests considering Roth conversions as a supplement but not at the expense of meeting RMD requirements.
   • Reiterates the importance of a consistent financial strategy over reacting to market fluctuations.

5. Cindy's Concerns: "IRA Loss and Withdrawals" [08:30]

   Listener Profile: Cindy, 73 years old, with a Vanguard IRA that recently lost value, contemplating withdrawing funds and converting to cash.

   Situation:

   • IRA dropped from $108,000 to $100,000.
   • Holds a mortgage, car loan, and minimal credit card debt.
   • Receives $2,000 in Social Security and works part-time.

   Jill's Response:

   • Immediate Action: "Take a couple grand out of this account, pay the tax that's due on that and get rid of that credit card debt." [08:45]
   • Investment Adjustment: Recommends reallocating funds from high-risk stocks to fixed-income or short-term bonds to mitigate further losses.
   • Tax Implications: Warns against large withdrawals to avoid heavy tax burdens.
   • Avoid Panic: Advises against converting all funds to cash, highlighting the importance of maintaining some investment to combat inflation and growth opportunities.

Notable Quotes

• Mark on Opportunities in Downturns [04:38]:

  "Times like this, there's usually some opportunities and this is one of them."

• Jill on Being Opportunistic [04:45]:

  "I love this idea that people are trying to be opportunistic."

• Roberta on Market Disruptions [09:15]:

  "Thank you both for your calm and steady responses to the recent disruptions in the markets."

• Jill's Closing Encouragement [10:10]:

  "Nobody else but you. Okay, so get in touch with us. Go to jillonmoney.com, click the contact us button, write us that note."

Conclusion

Jill Schlesinger wraps up the episode by acknowledging the anxiety many feel due to rapid economic changes. She encourages listeners to engage directly with the show for personalized advice and highlights the importance of community support during uncertain times. Subscriptions to additional content and support services are promoted, emphasizing the show's commitment to helping listeners navigate their financial journeys.

Final Thoughts by Jill:

"People are scared out there, so let's calm each other down. We're a community. This will work when we pull it all together."

Additional Resources

Listeners are invited to visit jillonmoney.com to submit their questions, join live discussions, and access a wealth of financial resources, including newsletters, blogs, and exclusive content through the Jill on Money Live service.

Note: Advertisements and promotional segments have been excluded from this summary to focus solely on the valuable financial insights discussed during the episode.