Podcast Summary: "Should I Go All Roth?"
Jill on Money with Jill Schlesinger
Release Date: April 24, 2025

Introduction

In the April 24, 2025 episode of Jill on Money with Jill Schlesinger, host Jill Schlesinger, CFP®, delves into the compelling question posed by listener Spencer: "Should I go all Roth?" The episode navigates through tax-advantaged retirement strategies, specifically focusing on Roth conversions, and addresses various listener inquiries related to retirement planning, investment allocations, and financial decision-making.

Main Discussion: Should I Go All Roth?

Listener Spotlight: Spencer's Dilemma [15:56]

Spencer, a 51-year-old earning $320,000 annually with his wife at 52, poses a pivotal question: "Should we go full Roth?" With a combined 401(k) balance of $600,000, no brokerage accounts, and plans to retire in approximately 10 years, Spencer is contemplating whether to convert his traditional 401(k) into a Roth account, especially given their high-income bracket of 24%.

Expert Advice:

• Mark's Perspective [14:23]:
  "I mean, it's a slam dunk for me. I would start using the Roth. And I don't know if you necessarily got to start, you know, converting everything that you've saved so far, but from here on out, I would make everything Roth."

• Jill's Insight [14:34]:
  "Yes, I think that I would go again. I think it's a way to diversify your investment so you don't have to convert... we would really appreciate and think that a 401k in a Roth version would be a better option for you guys going forward."

Key Takeaways:

1. Diversification Through Roth Accounts: Converting to Roth allows for tax diversification, providing flexibility in managing taxable income during retirement.
2. Timing of Conversions: Initiating Roth conversions now can lock in current tax rates, which may be advantageous before potential rate increases.
3. Affordability of Tax Bills: It's crucial to have funds available to cover the taxes incurred from conversions without dipping into retirement savings.

Listener Questions and Expert Responses

1. Tina's Long-Term Care Policy Consideration [00:06:30]

   • Question:
     Tina, single with no children, is evaluating a work-offered long-term care policy costing $93/month for a $50,000 benefit.

   • Jill's Advice:
     "As long as you can afford it, I think this is a very, very good benefit... and anyone else who's listening, if you have a long term care benefit through work, this might be a really good way to get at least some partial coverage."

2. Gary's Employer-Sponsored 401(k) Dilemma [04:32]

   • Question:
     Gary, 62, with a $300,000 401(k) and nearing retirement, is uneasy about potential losses and considers options like opening an IRA or transferring to a PIMCO short asset fund.

   • Jill's Guidance:
     "If your future pension covers a lot of your needs... we may want to look at the retirement the 401k... we need to hear more about what else is going on in your life."

3. Jennifer's Investment Allocation Concerns [07:45]

   • Question:
     At 53, Jennifer is approaching retirement with a $1.34 million portfolio, primarily in stocks, worried about a potential recession.

   • Jill's Recommendation:
     "If the $100,000 pension covers most of your needs, you don't have to go crazy with a reallocation... just be careful."

4. Habib's Career and Mortgage Payoff Strategy [09:16]

   • Question:
     Habib, 49, weighing a state job with a pension versus a higher-paying private sector job, and considering accelerating his mortgage payoff.

   • Jill's Strong Stance:
     "Do not pay off that mortgage. That thousand dollars a month is absolutely more valuable to you."

5. Janine's Cost of Living Adjustment for Relocation [10:02]

   • Question:
     Janine and her husband are considering moving from Michigan to a more expensive Minnesota to be near family and seek advice on handling increased living costs.

   • Jill's Practical Advice:
     "Maybe what you do is you rent for a little while and if you really like it, then you sell your house in Michigan."

6. Nancy's Portfolio Loss and Rebalancing Strategy [12:29]

   • Question:
     Nancy is distressed over a 20% drop in her bond indexes after moving her 401(k) to an IRA and contemplates taking the loss or staying invested in equities.

   • Jill's Counsel:
     "I would just rebalance... you're going to be investing in this account for a long time... I don't think that any of us can anticipate where the market is going next."

Insights and Conclusions

• Roth Conversion as a Strategic Move: The episode underscores the benefits of Roth accounts for tax diversification and long-term financial flexibility, especially for higher-income earners contemplating retirement in the near future.

• Personalized Financial Planning: Jill and Mark emphasize the importance of individualized advice, considering factors like existing pensions, risk tolerance, and overall financial goals before making significant moves like Roth conversions or altering investment allocations.

• Maintaining Financial Discipline: Advice consistently points toward maintaining disciplined financial strategies, such as not hastily altering mortgage payments or investment allocations based on short-term market fluctuations.

• Utilizing Employer Benefits: Leveraging work-offered benefits, such as long-term care policies, can provide valuable financial protection without significant personal expenditure.

• Holistic Retirement Planning: Comprehensive retirement planning involves assessing multiple income streams (pensions, Social Security), investment portfolios, and lifestyle choices (like relocation) to ensure a secure and comfortable retirement.

Notable Quotes

• Mark on Roth Conversion [14:23]:
  "I mean, it's a slam dunk for me. I would start using the Roth."

• Jill on Mortgage Payoff [09:08]:
  "Do not pay off that mortgage. That thousand dollars a month is absolutely more valuable to you."

• Jill on Rebalancing Investments [12:32]:
  "I would just rebalance, and you're hold firm. ... I don't think that any of us can anticipate where the market is going next."

Conclusion

The episode "Should I Go All Roth?" provides listeners with nuanced insights into Roth conversions and broader retirement strategies. Through real-life listener questions, Jill Schlesinger and co-host Mark deliver actionable advice, emphasizing the importance of personalized financial planning and disciplined investment strategies to navigate the complexities of retirement planning successfully.

For more detailed discussions and personalized advice, listeners are encouraged to visit jillonmoney.com and explore additional resources or submit their own financial queries.