Roth IRA vs. Traditional IRA: Which is Better for Retirement Savings? - 558

Summary

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YMYW Podcast Episode 558 Summary

Roth IRA vs. Traditional IRA: Which is Better for Retirement Savings?

Hosts: Joe Anderson, CFP® & “Big Al” Clopine, CPA | Air Date: December 2, 2025

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Episode Overview

This episode tackles the age-old personal finance debate: Should you prioritize Roth IRA or Traditional IRA contributions (or conversions) for retirement? Joe and Big Al draw on listener questions and real-life scenarios to illuminate the tax, timing, subsidy, and legacy considerations that make this decision so complex. Throughout, they layer education with the irreverent humor and banter YMYW is known for.

The guys field some meaty listener questions touching on Roth conversions at a very high tax bracket, navigating the “ACA cliff” during early retirement, and strategies for pre-tax vs. post-tax contributions for high earners and soon-to-retire couples. The through-line: There may not be a universal best answer, but understanding your numbers and tax situation is critical.

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Key Discussion Points & Insights

1. Roth Conversions for High Earners: Does It Ever Make Sense?

Case: “McDreamy Dempsey” (55, $3.5M+ pretax, $7M target, 37% tax bracket)

• Situation: Huge tax-deferred assets, top tax bracket, lucrative real estate income expected in retirement. Asks if converting to Roth in the 37% bracket ever makes sense and to what bracket he should aim.
• Analysis:
  • Converting at 37%? Both hosts say not advisable unless you have no other choice. Wait until retirement, when income drops, and convert in lower brackets.
  • Use current years to max Roth contributions for diversification, but don't force big conversions now.
  • Start conversions after retiring (age 65–75), when RMDs will force up income, but you may still have some lower-bracket room.
• Notable Quote:
  • “I don't think I would convert at 37. …But then when I retire at 65, then I'd be doing conversions for 10 years till I hit 75. That's what I would do.” – Big Al (04:00)

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2. The ‘Roth Conversion Lag’ and Paying Taxes from IRA Assets

Comment from Gary in La Crosse, WI

• Observation: Most financial advisors ignore the “lag” created if you pay conversion taxes via IRA withdrawals, not outside funds. This can take 15–20 years to break even at moderate growth/tax rates.
• Discussion:
  • Joe and Big Al agree: Paying conversion taxes from your IRA (not taxable funds) generally makes conversions unattractive.
  • Exceptions: Only makes sense if you have huge IRA balances and no way to pay with outside money—and even then, net/spending power is what counts.
  • Don’t focus on gross balances; always look at net after-tax values and long-term impacts.
• Notable Quote:
  • “If you’re paying out of the retirement account to do the conversion, in most cases the math doesn’t pencil out because you gotta pay the tax to pay the tax.” – Joe (10:48)
• Memorable Moment:
  • The “Roth Lag” gets a pub-worthy debate, with both hosts agreeing the issue is misunderstood and that they’d love to argue it further “over a beer at the Bodega Pub.” (09:45)

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3. ACA Subsidy Cliff vs. Roth Conversions in Early Retirement

Case: “Wine Guy and Gal” (58/56, $1.7M brokerage, $2.5M tax-deferred, retired, facing ACA health coverage income limits)

• Situation: Retired early, covering expenses from brokerage, worried that Roth conversions will push income above the ACA subsidy cliff (~$84,000 MAGI), triggering $15K+ higher annual premiums.
• Analysis:
  • While on COBRA: Yes, do as much conversion as feasible, up to the 24% bracket if possible.
  • While on ACA: Once dependent on ACA coverage and subsidies, be careful—not worth forfeiting a $15K subsidy for moderate conversions.
  • Future Law Uncertainty: If subsidies go away (current law: expire after 2025), might be wise to convert again; otherwise, wait until on Medicare at 65 to resume conversions.
  • Go big or hold off: If you’re going to lose the whole subsidy, do a larger conversion so the effective “tax” rate is diluted.
• Notable Quotes:
  • “If you think about should they do Roth conversions this year while they're on COBRA? Yes, of course… Then next year you probably won’t do conversions because of the ACA Premium Credit.” – Big Al (23:03)
  • “Either you don’t do any or you go big is what I would say.” – Big Al (24:11)
• Memorable Moment:
  • “The Affordable Care Act, Al…was it really meant for people with $4 million?” – Joe (21:21); Al notes the subsidy’s design flaw (based strictly on income, not assets).

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4. Traditional vs. Roth Contributions: Case-by-Case Spitballs

a. Robert from Napa (50/49, $425K household income, $4M assets, planning to move to lower-cost state)

• Situation: High earners, significant pretax and Roth assets, wants to know how to split contributions.
• Advice:
  • Both should maximize Roth 401k contributions now, plus after-tax to mega backdoor if possible.
  • Continue some pre-tax via 457b or SEP IRA for additional diversification.
  • At their income (top of 24% bracket), more Roth “tilts the scales.”
• Notable Quote:
  • “I would do as much Roth as possible…as far as conversions, I probably wouldn't convert much because they're already at the top of the 24.” – Big Al (29:05)

b. Luke & Lorelei (42/39, $220K income, aiming for $120K/year retirement, four kids, military/VA/disability income)

• Situation: Wants to know if making all contributions Roth is smart, and if they’re saving enough.
• Advice:
  • Yes, switch 401k contributions to Roth—at 22% bracket, it likely makes sense, especially with pension and Social Security coming.
  • Coast mode is okay, but consider increasing savings as debts are paid down if the goal is early retirement or more travel; balance fun and savings.
• Notable Quote:
  • “It's a good tax rate and you're young enough that you'll probably make more money later, maybe be in higher tax brackets. So yeah, I would definitely go the Roth option.” – Big Al (39:54)

c. Phil & Claire (48, $395K income, $1.9M assets, $150K/year retirement target)

• Situation: Stable/high income, saving $100K/yr, concerned about optimal Roth vs. pre-tax mix for retirement.
• Advice:
  • At income (24% bracket), switch to Roth 401k/403b contributions to build more tax-free income in retirement.
  • When retired at 60, with gap years before RMDs and pension/Social Security, can do strategic conversions to further optimize taxes.
• Notable Quote:
  • “At age 60, you got a lot of time to convert the rest of your dollars into a Roth IRA at lower tax brackets.”—Big Al (46:00)

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Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote/Note | |-----------|---------|------------| | 04:00 | Big Al | “I don't think I would convert at 37. …But then when I retire at 65, then I'd be doing conversions for 10 years till I hit 75. That's what I would do.” | | 10:48 | Joe | “If you’re paying out of the retirement account to do the conversion, in most cases the math doesn’t pencil out because you gotta pay the tax to pay the tax.” | | 23:03 | Big Al | “If you think about should they do Roth conversions this year while they're on COBRA? Yes, of course… Then next year you probably won’t do conversions because of the ACA Premium Credit." | | 24:11 | Big Al | "Either you don’t do any or you go big is what I would say.” | | 29:05 | Big Al | “I would do as much Roth as possible…as far as conversions, I probably wouldn't convert much because they're already at the top of the 24.” | | 39:54 | Big Al | “It's a good tax rate and you're young enough that you'll probably make more money later, maybe be in higher tax brackets. So yeah, I would definitely go the Roth option.” | | 46:00 | Big Al | “At age 60, you got a lot of time to convert the rest of your dollars into a Roth IRA at lower tax brackets.” | | 21:21 | Joe | “The Affordable Care Act, Al…was it really meant for people with $4 million?” |

Memorable moments:

• Running gags about listener nicknames (“McDreamy”, “Wine Guy”, “Luke & Lorelei”, “Phil & Claire”) and sitcom references—humor lightens the technical talk.
• “Roth Lag” at the Bodega Pub—listeners are encouraged to challenge the experts' take, especially Gary from La Crosse!

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Segment Timestamps

• [00:57] McDreamy Dempsey’s high-earner Roth conversion dilemma
• [06:58] Roth conversion lag: Gary from La Crosse’s challenge
• [18:03] Wine Guy & Gal: ACA cliff, Roth conversions, and health insurance subsidies
• [26:31] Robert from Napa: Pre-tax vs. Roth for high-earning couple
• [33:09] Luke & Lorelei: Early 40s, military/VA, Roth savings vs. coast mode
• [42:10] Phil & Claire: High earners with pension, Roth vs. pre-tax in the final stretch

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YMYW’s General Roth vs. Traditional Insights

• Don’t blindly convert: Always examine YOUR current and future tax brackets, expected income, and how you’d pay conversion tax.
• Pay conversion taxes with outside (non-IRA) funds only; “Unless you have no choices, paying with IRA assets is almost never optimal” (10:48).
• Watch for subsidy cliffs: ACA, IRMAA, credits can make conversions cost-prohibitive in some years.
• Roth contributions make sense when: 1) tax rate is low, 2) you expect higher rates later, 3) you want flexibility/hedge future uncertainty, or 4) you value tax-free legacy.
• Conversions in ‘gap years’ (after retiring, before RMDs or Social Security) tend to be ideal.
• Balance fun and savings: Coast mode is OK if you’re on track, but supercharging savings buys flexibility for earlier retirement or more travel.

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Final Takeaways

• “Traditional vs. Roth is never one-size-fits-all. Play out your actual numbers.”
• Make Roth decisions with a sharp eye on tax brackets, expected future income, and ancillary impacts (subsidies, IRMAA, capital gains).
• The best approach often mixes pre-tax and Roth for diversification and flexibility.
• “Have the conversation—ideally with a professional, and maybe a beer at a good pub!”

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For full guidance: Check the timestamps above to jump to scenarios most like yours—or visit YourMoneyYourWealth.com for more spitball retirement analyses and download their Roth IRA guide.

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Transcript

[A]

All your lifetime tax free investment growth needs in a Roth megasode. Today on youn Money, you, wealth podcast number 558, McDreamy Dempsey wants to know if converting to roth in the 37% tax bracket ever makes sense. Gary and Lacrosse warns the fellas about Roth conversion lag. And when it doesn't make sense to convert, wine guy and gal in Northern California want a spitball on whether they should protect their ACA subsidies or keep converting to Roth before Medicare kicks in. Then it's the classic question for Robert in Napa, Luke and Lorelei in Indiana, and Phil and Claire in California. Should they save for retirement in their traditional pre tax accounts or their post tax Roth accounts. Different needs, different situations, same big question. Which strategy gives you the smarter tax outcome? Let's dig in and find out. I'm executive producer Andi Last, and here are the hosts of youf Money, you, wealth, Joe Anderson, CFP, and Big Al Clopine, CPA.

[B]

Okay, McDreamy Dempsey.

[A]

You know you get that reference, right?

[B]

That's Patrick Dempsey.

[A]

Yeah, Patrick Dempsey. When he was on Grey's Anatomy, he played a character, Derek Shepard, who was known as Dr. McDreamy.

[B]

His name is Dr. Shepard, but they called him McDreamy.

[A]

Yes, because I mean, you know what he looks like, right?

[C]

He's good looking. Got it. Even I could see that as a guy, he was good looking.

[B]

Yeah. All right, we got Drake Russell's. So he's calling himself McDreamy.

[C]

Yeah. He must be really good.

[B]

He must be super hot.

[C]

Yeah, I think so. Why didn't we get a picture?

[B]

Well, here's.

[A]

Here's what Dr. McDreamy looked like.

[B]

Yes.

[C]

Yeah. Yeah. N. He's a good looking guy.

[B]

Now, I met him like long time ago.

[C]

You did? Uhhuh.

[B]

He drives race cars, so.

[C]

Oh, okay.

[B]

Drove race cars with my college roommate's buddy.

[C]

Oh, okay. But you're part of the rich and famous.

[B]

Yeah, I'm just dropping names.

[C]

Who else have you met?

[B]

Like hello? That was about it. Hey, McDreamy. How's John? That's exactly how the conversation went.

[C]

Yeah. It lasted that long?

[B]

Yeah.

[C]

Yeah. And he did even look at you?

[B]

No, not really. Drink Russell's Reserve. Whiskey sour. Okay. All right. He drives a little 2015 Audi 88. Diesel.

[C]

Diesel. Wow.

[B]

Okay, here's his question. He's 55, currently has over $3.5 million tax deferred accounts, expect to retire at 65 with the value increasing to well over $7 million with contributions and estimated 7% return. We got a Cash brokerage account to cover Roth conversions. I'm currently in 37% tax bracket. In addition to max Social Security benefits at 800,000 dol 70, I expect $200,000 of yearly income at age 65 from commercial properties. To what tax bracket should I convert? No wonder he's McDreamy. He's got a ton of cash.

[C]

He does a lot of income and a lot of cash.

[B]

A lot of income. Have this. We're going to have that. Yeah. His balance sheet is definitely McDreamy.

[C]

Well, if you look at. Let's use this number, which probably is right. 7 million. 4% of that would be 280,000 of income. That would be the RMD, roughly. Then you got 200,000 of commercial real estate. We don't know if that's sheltered with depreciation or not. Let's assume it's not. Just for now. So that's 480 plus Social Security, plus whatever else there might be. So that's a pretty high bracket.

[B]

Call it $500,000.

[C]

Yeah, call it 500,000. And I think that's probably 32% bracket. So if you can convert anything into the 24, do it. I mean, it doesn't sound like you.

[B]

Can right now, but in the 37% tax bracket.

[C]

Yeah, I can't do it now. I don't think I would convert at 37. I don't think he'd be there. I think I might wait until.

[B]

Would you switch contributions currently?

[C]

Yeah, out to Roth? Probably just. Just for a little diversification. Even though, I mean, it doesn't really pencil out. But just to get it started, he's.

[B]

Going to be in the 35% bracket at least.

[C]

32.

[B]

32, yeah.

[C]

Yeah. So I don't know. I think I would. If it were me, I probably would switch to Roth contributions just to start some tax diversification, knowing that I'm paying a lot of tax on that. I get that. But then when I retire at 65, then I'd be doing conversions for 10 years till I hit 75. That's what I would do. Because at that point, income's lower. You don't have Social Security yet. Income's lower. Don't have your RMDs yet. So that would be a good time to do it.

[B]

35% tax bracket is 250 to 626. So what, he makes over $600,000 now?

[C]

Yeah, yeah, yeah.

[B]

That's a pretty big bracket. 37 is 626,000 or above is the 37. So he's 55 going to work another 10 more years. That's it. Well, I mean it's a good problem to have. Again, it is three and a half million, seven million. If it's all pre tax, maybe you do Roth just to get the tax deferment. Tax free. Deferment.

[C]

Yeah. Just to get started on the over 10 years.

[B]

You max that out at 30,000 plus if he has after tax dollars. And you convert those.

[C]

Yeah, no, I'm fine with that.

[B]

I just wouldn't do conversion.

[C]

I wouldn't do a big conversion until retirement.

[B]

Yeah. And I think it's an easier play to do a conversion. You got to cut a check to write to the irs. And that's always kind of a pain in the ass.

[C]

You know, when you make as much as he's making you probably you're not.

[B]

Going to miss the. He doesn't even know what his net paycheck is that you're looking. Doesn't even look.

[C]

Money shows up.

[B]

Money just appears in the account.

[C]

That's why he's McDreamy. Yes. Yeah.

[B]

So, yeah, he's done a good job. Congrats. But I don't know if I was going to pick a name I was going to write in. I don't know if I'm going to go McDreamy on myself.

[C]

What would you.

[B]

I think I'm very handsome.

[A]

I was going to say you're usually so self deprecating, but wow, that just went out the window.

[C]

Well, who would you pick?

[B]

I don't know.

[C]

Someone cool.

[B]

Yeah. I don't know Papa Ganoush.

[C]

I do. I'd be Chuck Norris.

[B]

Chuck. You do kind of look like Chuck. Chuck is getting old, man.

[C]

He's getting old. Yeah. I guess that's what I'm gonna look like.

[B]

And it's chuck nor his 90s.

[C]

No, he's probably 80.

[A]

He's 85. He was born March 10th of 1940. He's 85 years old as of the date of this recording.

[B]

Yeah, I bet he still kicks some ass.

[C]

Oh, I wouldn't let him wrestle with it. Yeah.

[B]

And he does push ups. The earth moves.

[C]

Yeah, right.

[B]

Yeah, but we got. This is just a comment.

[A]

It's a comment, but it's. It's got some meat on it. So I figured this would be a good thing for you guys to talk about.

[C]

Yep, got it.

[B]

Okay. Joe, Big Al, love the show. Entertaining, educational. Keep it up. I have an observation about what seems to be the fact that the vast majority of financial advice, yourself included, sing off conversion song without really giving the. No conversion. It's due.

[C]

It's there. Yeah.

[B]

I've talked about when it makes sense to convert or not to convert.

[A]

That's one of our most popular episodes. Yes.

[C]

Yeah, I think we've kind of gone. There's pros and cons, every situation.

[B]

Probably 10 cons to do a conversion. And I could go through them and.

[C]

Let'S just kind of continue in a hot mitten minute.

[B]

And a hot minute. It might take me a little bit more than a hot minute because I'm still a little tired from my flight back from Charleston.

[C]

Got it. Okay.

[B]

Specifically FAs. Oh, he's calling them FAs. He's got to be in the business. Yeah, 100% in the business right here.

[C]

As financial advisors seem to think that.

[B]

All Roth conversions will be paid by some magic cash account hidden under the neighbor's rug.

[A]

Wouldn't that be awesome?

[C]

That's what we assume.

[B]

Totally.

[C]

We're always assuming that you got a rug at your neighbor's house.

[B]

That's magical.

[C]

Magical, yeah.

[B]

Assuming the typical person may need to pay the conversion out of the traditional IRA pot, which will cause a lag for the Roth for as much as 15 to 20 years at 4 to 5% interest before the total balances traditional or Roth post tax and a 12 to 15% federal tax bracket and 68 state rate are the same. Give it a go on a spreadsheet starting with $20,000 earning 5% in a traditional versus $16,000 in a Roth $20,000 minus four in tax. Given this reality. To Roth or not to Roth. It's not as easy of a decision as you all make it out to be. If you are young no brainer, convert to Roth. If you are within 15 to 20 years of life expectancy. The lag in the overall balance in traditional Roth post tax upon inheritance net depends on your goals. If you want more money in your Go go years. Oh, this guy. Go go years.

[C]

That's your favorite.

[B]

I hate it. No, conversion makes more sense. If your goal is to maximize hair air inheritance, then convert.

[C]

I like that recovery.

[B]

Yeah, it's short. It seems like FAA need to include the fact that many retirees will need to take from traditional to pay for the Roth conversion. What this early payment does for accumulation total balances, traditional versus Roth. That is the Roth leg.

[C]

Roth lag. Okay, okay.

[B]

You got the leg in. The Roth needs to better be presented and understood. It's not a no brainer decision. Okay. To make up for my potential suggestion, I owe you a beer. At the Bodega Pub in La Crosse, Wisconsin. Thanks for hearing me out, Gary.

[C]

All right.

[A]

And he said to make up for his pointed suggestion.

[B]

All right.

[C]

Yeah, okay.

[B]

The Bodega Pub.

[C]

Yeah. You've been there?

[B]

No. Been lacrosse, though.

[C]

Yeah.

[A]

You can go and have an argument about Roths with Gary here.

[B]

Oh, that would be such a good time. I think that that's exactly what I.

[C]

Would want, to have a beer and have a. Narrative arguments at the Bodega Pub.

[B]

I do like a good pub.

[C]

Yeah, me too. You know, I found one in Idlewild.

[B]

You did?

[C]

It's the Idyllwild Brewery.

[B]

Okay.

[C]

That's pretty good. Yeah.

[B]

Yeah. I'd rather take a pub than like a nice fancy restaurant any day of the week.

[C]

Same. Yeah, it's more casual. Yeah.

[A]

Better place to have a Roth argument.

[B]

Yeah. I don't know. Yeah. Okay. If you're going to take the money out of the IRA to pay the tax. How many times have we said it probably doesn't make sense to do the conversion?

[C]

I think we said that every time.

[B]

Unless you have millions of dollars in your IRA and no other choice, have no other choice to pay the tax inside the ira, then it may make sense. But if you're paying out of the retirement account to do the conversion, in most cases the math doesn't pencil out because you got to pay the tax to pay the tax. You're taking money out, paying tax on that to pay tax. It doesn't. It's like, yeah, that. That's a hard recovery. Maybe that's what he means by the leg.

[C]

Maybe that's the lag.

[B]

I like to say you got to pay the tax to pay the tax on the. Yeah, because it's just like.

[C]

Yeah, yeah. Gary, we're kind of agreeing with you. I mean, I think we say that almost every time now. That's part of the reason why we have people tell us what their assets are, how much they have in a retirement account, in a Roth and in a non retirement account. Right. So if they have money in a non retirement account that they don't necessarily need to live on, then they've got additional cash to be able to pay taxes on Roth conversions if it makes sense, given their bracket. And Joe, I agree with you. I mean, I think the only time where we suggest it, like, let's say.

[B]

Someone'S, I'd much rather take a home equity line of credit out before paying tax on my retirement.

[C]

Paying tax on tax. Right. So. So let's say you have a $5 million, IRA and no other assets whatsoever. Right. And you're 55. By the time you're 75, maybe it's going to be 20 million if it doubles twice. I would rather actually pay some tax out of the IRA to get some of that to a Roth, but that would be an unusual situation. We don't see very often, but we hardly ever recommend that. But I will also say, I think when you look at dollars in an IRA or net of tax, I actually think the day you do the conversion, you're in the same exact spot. And let me quick example, right? So you got $100,000. And let's say what can you spend? If it's 25% tax rate, you can spend 75,000. You take the 100,000 out, you got to pay $25,000 tax, you got 70. That's what you got. So let's say you do a Roth conversion and using the example of paying it for out of your IRA, even though we don't necessarily recommend that. So yeah, 100,000 comes out, you got 75,000 in the Roth. Cause you got to pay 25,000 in tax. It's the same thing. Now you got in the Roth 75,000 versus what you could have spent in the IRA. And if you're thinking, well, time value, money growth, well, let's double it so that $100,000 IRA becomes 200,000, 25% tax, that'd be 50,000. You have 150,000 spending power, great, $75,000. Roth doubles 150,000. You got the same spending power. It's same, same. It's that people don't really seem to get that.

[B]

Right. They look at the total balance of the account and that's how they're running their spreadsheets.

[C]

Yeah, I guess if you are looking at total balance, I agree with that.

[B]

But you have to look at net attacks. What can you spend?

[C]

Right, right.

[B]

The sooner that you get the money out of the retirement account and into a Roth ira, you take the unnecessary tax rates out of the. If you're going to be in the same tax bracket, it makes sense to do the Roth, because now all of the money in the Roth ira, even though on your account balance it's going to be lower. Yes, but all of that money is yours. If it's in a retirement account, all of that money's not yours. Your partner's still with the irs, and you got to give the IRS a little chunk of change, depending, of course, on what tax brackets that you're in.

[C]

Yeah, it's not like a home loan that stays steady. The taxes keep going up. The money you got in your retirement.

[B]

Again, the higher the account balance grows, the more time you have. He's like, Well, I got 15, 20 years. It doesn't make sense. Well, you got 20 years of growth.

[C]

Yeah.

[B]

Double twice, right? Guess what? Your tax bill doubles twice, right.

[C]

It's the same. Same.

[B]

Unless tax rates go down. If tax rates go down, the tax rate might not double twice, but it's still going to be a lot of money.

[C]

Right.

[B]

The longer that you keep the money into the ira, the more tax you will pay, Period.

[C]

The reason that you do the Roth, even if it's the same bracket, is because. So now you got more flexibility in retirement. If you have a year where you need extra cash, you can pull some out of the Roth and not go into a higher tax bracket. Or maybe you favor some of your growth assets, your growth mutual funds in your Roth and your safer assets in your retirement account. So now you're going to end up long term, more volatile long term. You should end up with more in the Roth ira. You'll be in a better spot. Or what if tax rates go up? Or what if you're married and a spouse dies now all of a sudden you're in single rates and your tax rates went up. There's a lot of reasons why you should convert, even if it's the same bracket. But, Joe, there's no same. Same from day one.

[B]

Yeah. I don't know. There's several reasons not to convert. You have to also take a look at. Here's, here's the other reasons, right. If you have, if you're going to blow yourself out of a tax credit. So we talked about this a couple weeks ago, right. With the new. I don't even know what it's called income. The senior tax credit.

[C]

Yeah. The senior bonus deduction had the extra deduction. 6,000 per person.

[B]

Yes. The credit. So then you have to really do the math there. Or you have to look at your IRMAA premiums. So that could jump you up into a higher bracket.

[C]

Or health insurance. Right. Or the ability to deduct your rental real estate losses that phases out. Or your net investment income tax is an extra tax if you're at above a certain income level. Right.

[B]

Or if your Social Security is going to be subject to income tax, or if you're going to pull. Or if you're in the 0% capital gains rate and you do a conversion now, your capital gains might jump up to the 15% rate.

[C]

Yeah, I can think of a lot of reasons not to do it, but.

[B]

There'S also probably just as many reasons or more to do it. It depends on your situation. But yeah, thanks for the. The conversation.

[C]

Yeah, good one.

[A]

See, there was some meat on that bone.

[C]

Yeah, I'd still grab a beer with Gary and chat about this more.

[A]

If McDreamy and Gary haven't convinced you that Roth conversions can get messy fast, especially when you push your tax bracket too far or fall into the conversion lag, this is your moment to get the Ultimate Guide to Roth iras. Click or tap the link in the episode description to download it for free. You'll have valuable information in print, mind you, about how Roth IRA contributions and conversions really work, how to avoid the mistakes that cost people thousands, and how to take full advantage of that lifetime tax free growth. And yes, the infamous backdoor Roth strategy is in there too, for anyone who makes too much money to contribute directly. You'll also learn the differences between a traditional IRA, a Roth IRA, and a Roth 450 and 401K. The pros and cons of each, the rules for taking money out of your Roth account, and a whole lot more that we cannot cover in one podcast episode. Click or tap the link in the episode description and download your copy of the Ultimate Guide to Roth iras. And feel free to share it along with the other free financial resources with anyone you know who needs to get their Roth strategy together before the end of the year.

[B]

We got wine guy and gal Nor the cow. Okay, you helped us with an answer last year. We decided to retire this February and we're saying, why didn't we do this sooner? Oh, I thought he was going to say, and you blew us up.

[C]

And it was a big mistake.

[B]

Back at work, we went bankrupt.

[C]

We used to drink champagne. Yeah. Now pbr.

[B]

Yeah, exactly. All right. The freedom from work emails, work emergency requests, and waking up stressed on Monday morning are priceless. Drink of choice is a Sonoma wine from Russian river, but love the occasional Paloma or margarita. Little tequila guy, huh?

[C]

Yeah.

[B]

All right. The Russian River. You know where that is?

[C]

Yeah, that's Northern California. Near Healdsburg, I think.

[B]

Got in. Wow. I never heard of Healdsburg.

[C]

Yeah, it's because you haven't been there. I actually have been on that river on a canoe before.

[A]

I've been on that river on a jet ski.

[C]

On a jet ski, Yep. Funny little side story. I was just getting to know Ann and she used to live there for like a year.

[B]

Okay.

[C]

Yeah. So I'm on the canoe, and I'm trying to oppress her. Something. Well, almost. Almost. I was paddling. I was going, like, right straight for the bank, you know, right into the bushes. And I would show her my skills where I'd just, like, go like that really quickly, and you can't turn a canoe that quickly. We went right into the bushes.

[B]

I don't think I've ever been on a canoe. Well, maybe I was when I was a child at camp.

[C]

Maybe so.

[B]

So you're in your 20s on a canoe.

[C]

Yeah. Yeah.

[B]

Got it.

[C]

I was, but upset. But more recently I would say, well, I. I'll do better than that. Three weeks ago, I was in a kayak on the Hanalei River.

[B]

Oh, kayak. Were you wearing a helmet? No. Daredevil, you okay? The wine guy's got a new question now.

[C]

Okay.

[B]

Should we delay Roth conversions until on Medicare after the latest tax bill recreates the ACA cliff? Oh, he's getting into this.

[C]

Yeah.

[B]

Portable Care Act Cliff.

[C]

Yeah, let's. Let's get into the specifics, and then we'll answer it.

[B]

All right. It seems going above the cliff is significant cost that distracts the Roth conversion benefits. All right, we're 58, 56 currently on cobra. We will have to move to aca health care plan next year. The estimated health care costs are $800 a month. If below 8,000, 4,000 magi. 400% poverty level for a couple, we will go $1. If we go $1 above 84,000, then we lose all subsidies, and health care would be $2,000 per month, or approximately $15,000 extra per year. We could keep our income below that $84,000 as we have $1,700,000 in a brokerage account to cover our daily expenses. We have another $2.5 million in retirement accounts that would not convert until we hit age 65 and go on Medicare. You know, the Affordable Care Act, Al, was it really meant for people that have $4 million?

[C]

No, but that's how it's being used right now. Okay, because Just. Just go back one second.

[B]

So, 400% of the poverty level, but is that the top.01% of all wealth?

[C]

Right. So it was designed on income, not on wealth. So. So in. In our opinion. I'll speak for you too, Joe. It's. It was slightly flawed how it was set up, because that means very wealthy people that can keep their. Their taxable income low can qualify for.

[B]

These subsidies, which are great subsidies.

[C]

They are. They're a lot.

[B]

And by all means if you qualify.

[C]

Go for it 100%. And so. And I think that's going to be my answer, but let's keep going.

[B]

Okay, so he's worried about the cliff. The cost of going over $84,000 income with Roth conversion seems to be too high. Even if we converted $100,000, it equates to an extra 15% tax on top of the 22% federal in 9% California. Of course, the issue is that the IRAs will grow and cause more conversions between 65 and 75 when RMDs are required. As a side question, would you suggest we do extra Roth conversions this year while we're on cobra? We are planning to convert to the top of the 22% tax bracket, but considering going to the 24% tax bracket, $250,000 taxable income while the extra 3.8 kicks in. Thanks and love the combination of humorous and banter and knowledge. So it's not an extra 15% tax, is it?

[C]

Well, if they do 100,000 conversion, that's what she.

[B]

Oh, because it's 15% or $15,000 extra. So that 15,000 on the 100,000 is a 15% tax on.

[C]

Yeah. So maybe to translate a couple things. So the way this works is once you're over the 400%, the poverty level, which in their case 400% is 84,000. So if you're 84,001, they call that a cliff, which means that whole subsidy goes away. And in this case, they've calculated theirs to be $15,000. So if you keep it below that, you get a $15,000 insurance subsidy. If you go a dollar over it, that whole $15,000 is lost. So it's a, it's a pretty, it's a pretty big deal. Right. And so if you, if you think about should they do Roth conversions this year while they're in cobra? Yes, of course. You got what, two and a half million dollars in tax deferred and you're in your 50s, 58 and 56. Yeah. Yeah. You should be converting that to the top of the 24, because this year you don't have that issue. Then next year you probably won't do conversions because of the ABA Premium Credit. However, they're currently supposed to expire at the end of 2025. And we don't know if they' extended or not.

[B]

But what do you think how many years you've been in tax? I would imagine they extend.

[C]

Well, you know, that's why we had the government shutdown because the Republicans didn't want to extend. So I would typically say, yeah, they will extend them, but in this particular political environment, no idea. So I think next year, I think. I think they wait to see what happens on their conversion strategy. But as it stands right now, I wouldn't convert next year because then you'd lose that $15,000. Unless here's one exception, and that is you don't convert 100,000. You convert like 300,000. Right. To get to the top of the 24% bracket, maybe 350,000. That way. That extra $15,000 relative to 300 or 350 is a lot lower percentage. So either you don't do any or you go big is what I would say.

[B]

Yeah. I don't Even know if 24 makes sense for them. If they got. What do they got? Two and a half and they're 58. They're not 68. So they have time.

[C]

They do.

[B]

I guess it depends on the credits, because if they extend through 65, he probably doesn't want to lose that 15%.

[C]

Totally agree. If they. Let's say they extend them, then I wouldn't do any more conversions until age 65, personally. Yeah. Because it's just too expensive.

[B]

But he's going to take a huge bite, right? Yeah. I think there's more math. But just looking at his simple math of saying, hey, I'm going to spend an extra 50, you got to look at the effective rate of what the RMD is. But it's too far out. It's 20 years from now. Who knows what tax rates are going to be and who knows what other subsidies are going to be in place.

[C]

Yeah, I know it's hard. All we can do is based on current law, and current law is we're sort of guessing whether things are going to be extended or not. But under current law, these subsidies go away in 2026. Will they be extended? Maybe, maybe not. We'll have to see. But I think for me, the biggest point would be I would do a.

[B]

Full conversion to the top 24.

[C]

Top of the 24 in 2025. Because you're on COBRA, so the subsidies don't apply to you. That way you get a big chunk out, and then after that, maybe you wait all the way to 65, depending upon what the tax laws are. We have to see.

[B]

Cool. All right. We got Robert from. Robert from Napa.

[C]

Okay. Another Napa.

[B]

Yeah. Hey, Joe. Big al. I'm currently 50, wife is 49, and we're planning to retire in about five to six years. We live in California and currently rent. But we plan to relocate to a lower cost state like Tennessee or Arizona after retirement. Wife and I enjoy a nice medium bodied Napa cab. Medium bodied, got it.

[C]

Yeah, I like full body.

[B]

Got it. I'm going to keep reading.

[C]

You better.

[B]

Combined income of 425,000. Okay. 380,000. Base, $45,000. Consulting income. We have rental. We have a rental unit that grosses about three and a half thousand dollars per month. Net $5,500. Given our current tax bracket and our future plan, does it make more sense to continue taking traditional retirement contributions or would it be wiser to switch to Roth? Below is our retirement contribution options. My wife, she's got a 401, $31,000. My 401K. Or I'm sorry, his 401K is $31,000. Wife's is $23,000. They have a Roth option. He's got a roth option. Wife's 401. After tax, additional contributions, she can do the mega backdoor. She also has a 457B plan that she can max out as well. And then he's got a SEP IRA from the consulting business that he can do.

[C]

Yeah. So that's about 100 grand in contributions.

[B]

Currently they got a traditional IRA of about two and a half million. Roth IRAs of 250,000. HSA accounts of 160, brokerage account of 600. High yield savings is 300. Crypto is 120.

[C]

Yep. And then getting more and more common.

[B]

Yeah, that's $4 million.

[C]

Yep.

[B]

Total. Okay, so what does he do? Well, he's got $2.5 million. He's 50 years old in the traditional IRA. I would switch. This is what I would do if I was him.

[C]

Yeah, go for it.

[B]

I would go Roth IRA and my 401. I would go traditional IRA. No, I would go traditional 401. Sorry, let me do this again. I would go traditional.

[C]

What's that word? Oh, my God.

[B]

I would go Roth 401k of $31,000 for Robert.

[C]

For him. Okay.

[B]

The wife, I would go Roth 401k of 23,000 for her.

[C]

Okay.

[B]

I would also do the after tax thousand of 15,000 and convert.

[C]

Yes.

[B]

And then I would go pre tax on the 457@23 5.

[C]

Okay.

[B]

And then I would set up it. Yeah, you could do a SEP IRA or you could do just a standard IRA because he's only putting $8,000 into it too.

[C]

Yeah, true. Can 457B is do they have Roth options or no? Yeah, they do.

[B]

I don't know if she works for a hospital, private or school district, so.

[C]

That would be a possibility too.

[B]

But I think that's enough. Roth. I would then have some pre tax.

[C]

Yeah. So the fact that they've got about two and a half million already and they're 50 and 49 and Roth, they've got some 260. Yeah, I think I would tend to agree with that. I don't think. I don't really know. Or we do know what the income is. 380,000, 45,000. Consulting. So 425. So they're kind of. They're right at about the top of the 24. So in other words, that extra deduction on the traditional doesn't help them that much because they're in the 24% bracket. So I think I would agree with you. I would do as much Roth as possible. Yeah, yeah, for sure. And then as far as conversions, I probably wouldn't convert much because they're already at the top of the 24. Right. So just leave that as is.

[B]

So they got $4 million liquid. They want to spend $130,000 on the. On track to retire in the next five to six years. Yeah. If you spend. If you save a hundred thousand dollars a year over the next five to six years.

[C]

Yeah.

[B]

Even at a 3% growth rate, you can afford $130,000.

[C]

Yeah, I agree. So here's my numbers. Starting at 4 million five years from now, 6% rate of return at a hundred thousand dollars a year, you end up at 5.9 million.

[B]

Well, let's just take $4 million today. If they take a 3% distribution rate, that's $120,000 a year. They want to spend 130.

[C]

Yeah, I know. They're already there.

[B]

They're already there.

[C]

And that's not even. That's not including their rental.

[B]

Yeah. Rental income or Social Security.

[C]

Yeah, yeah. And. But just doing my math. And then they're spending 130 inflated becomes 151. Then it's a 2.6% distribution rate. And you're right, they're just over 3% right now before the rental. So it could potentially retire sooner.

[B]

Yeah, I think they're all set to retire. I mean, punch right now they want to move to a low, but are they going to buy a house in Tennessee or Arizona? So does $600,000 of the brokerage account go to a mortgage or I mean to a new house purchase? Maybe because they're renting today.

[C]

Yeah, maybe that would be a reason they're renting today. Maybe that would be a reason to keep working. So they got extra capital for that, so.

[B]

But I still think they're in really good shape.

[C]

Me, too. I agree.

[B]

Cool. Okay.

[C]

Well, and I think, you know, hopefully you get some Napa cabs in Tennessee. I'm sure they have them.

[B]

Yeah, hopefully. Mild body.

[C]

Yeah.

[A]

Medium Joe and Big Al spitball. Roth versus traditional post tax versus pre tax retirement savings for two more couples in just a sec. But what about you? Are you saving enough? Are you saving to the right account for tax efficiency for your needs? Now is past the time to jump on your year end tax planning. Watch 10 tax cutting moves to make right now on YMYW TV and get this week's limited time special offer. The Companion Top 10 Tax Tips Guide for real steps you can take before December 31st to lower your 2025 taxes. We're talking Roth conversions that count for this year, maxing out your retirement contributions, harvesting tax losses or gains, and a bunch of other moves that only help out if you do them before the calendar flips. And as of today, that means you've only got four weeks left. Get the full checklist of what to tackle before time runs out so you send less of your money to the IRS next April. Click or tap the links in the episode description to watch the show and to grab the free guide before the special offer changes this Friday.

[B]

Hi, guys. Love the show. Started to binge listen a few months ago to pass the time on a work trip. And I learned something new on every episode.

[C]

All right. Okay.

[B]

I'd listened to several episodes before I pulled up the website to see what you guys actually look like.

[C]

Here we go.

[B]

In my head, I picture Joe to be Murray from the Goldbergs. I don't know who Murray is, and I don't know what the Goldbergs are.

[A]

You don't want to know, but I'll show you anyway.

[B]

Oh, my God.

[C]

Oh, spitting image.

[B]

Identical twins. And I was not disappointed.

[A]

That looks like Joe, right? That looks like Joe.

[C]

Yeah.

[B]

That guy weighs like 350 pounds.

[C]

Yeah, Joe Chair doesn't. You're. You're. You're trim.

[B]

I'm like 200.

[A]

This is a good shot of him, too.

[B]

And I was not disappointed. What does that mean?

[C]

He thought you look like.

[B]

Yeah, just exactly. Spitting image.

[C]

Okay.

[B]

All right.

[C]

I wonder what he thinks.

[B]

Luke and.

[A]

Luke and loyal. That's actually a reference to the Gilmore Girls TV show.

[C]

Oh, okay.

[B]

So this guy Watched the Goldbergs and the Gilmore Girls.

[A]

Gilmore Girls?

[C]

Yes. I haven't seen either one. Have you?

[B]

No. I drive a 2023 Bronco.

[C]

Yeah.

[B]

All right. Lorelei drives a 2019 Honda Odyssey. My drink of choice and flavor of Sam Adams in Lorelei Enjoy some red wine on occasion. Here's the numbers. Luke 42 Lorelei 39. Salary $220,000. Total investments 450,000, which includes 270,000 in a 401K, 105 in a TSP, 30,000 in a Roth and 45 in a traditional IRA. I plan to retire somewhere between 60 and 65. We plan to spend around $120,000 per year in retirement. Laurel I has mostly been a stay at home mom. Works part time and will retire whenever she wants. I will receive $1,500 monthly pension with a COLA of 60 and will be eligible for Tricare at that age. I received $1,300 a month from a VA disability and will continue that for life. I'm on Track to get $4,000 a month Social Security at 67. Lorelei will take the spouse benefit of $2,000 per month. I will contribute $20,000 per year to my 401. And the employer matches $20,000. How come he didn't say anything about you?

[C]

Good question. I don't know. He was only curious to see what you look like I guess.

[B]

Oh, that's kind of disturbing. I am wondering. It would be smart to start pulling out a start putting all or Most of the $20,000 contribution into my employer's Roth 401 option instead of the pre tax. Since it is so common for you to recommend Roth conversion, does it make sense to just get more into ROTH now the 401s with fidelity so there's plenty of good investment options including the option to use a brokerage link which allows you to invest in almost anything you want in the stock market. In my estimate we will have plenty of fixed income and retirement Savings. We'll cover $120,000 per year and still leave a very nice inheritance to our four daughters. Should I be ramping up my retirement savings once I have some debt paid off? $25,000 out a loan and $50,000 HELOC. Or can I go on coast mode and keep my savings rate the same? The poor girls are expensive and we love to travel so I have plenty of things to spend the money on. Thanks for the spitball. Luke and Lorelei, do these folks look familiar to you?

[A]

This is apparently Luke and Lorelei no.

[C]

No. Recognize.

[B]

Yep.

[C]

Those characters. No. Yep. I guess you and I.

[B]

Is there any kung fu?

[A]

I don't think so.

[C]

Is there. Is it a spy thriller?

[B]

No blood, no violence.

[A]

Chills out.

[C]

All right, well, here's a couple things to set the table, Jim. Okay, so didn't really ask for a retirement spitball, but I felt like doing one instead.

[B]

Okay.

[C]

So I said, what happens if he retires at age 60? Based upon the numbers we have, and that's starting with about $450,000 18 years from now, 6% rate of return, adding about 40,000 a year, you end up with about 2 1/2 million. Okay, so far, so good. Now, spending, I want to spend $120,000 a year, but you got to do an inflation rate, so 18 years at 3%, that's $204,000. So you're up over $200,000 spending. And then pension between the two of them would be about 2,800. At age 60 now, that would be 40 grand. Yeah, about 48, actually, at that point. Yeah. Call it 50. So about 100. One hundred and fifty five is the net on 2.5 million. That's a 6.2% distribution rate. I know we're not including Social Security yet, but that. I would feel uncomfortable with that. Now, age 65, that looks a little bit better because now he ends up at 3.6 million. Spending minus fixed income is about 184,000. Now, that's about a 5.1 distribution rate. And then you got Social Security right around the corner. I'm okay with that.

[B]

Yeah. You said 60 to 65.

[C]

Yeah. And. And the truth is, I mean, we're talking 18 to 20, 23 years. So. So the real truth is, when the time happens, you'll. You'll be able to decide when you can retire. So I'll give you kind of a blanket answer. Yes, you can retire between 60 and 65. Based upon the numbers you gave me, 65 is probably more realistic than 60, but I think you're in the ballpark there, so we'll start with that, Joe.

[B]

Okay, he's got $30,000 in a Roth IRA, right. And his total income is how much?

[C]

I'm not sure. He's. Oh, here it is. $220,000. Between the.

[B]

$220,000.

[C]

Betweenthe two of them.

[B]

Between the two of them. All right, so he's in the 22% tax bracket.

[C]

Yep.

[B]

Yeah, I was switched to Roth. I would do. Yeah, I agree with that, because you're probably going to be in the 22% tax bracket in retirement with a $60,000. Well, he's got the VA, so that's tax free. So he's going to have decent fixed income.

[C]

Yes. Yeah.

[B]

And then if all of his savings is going into the retirement account at this point, he's got 400,000 roughly in retirement accounts that are pre tax. They get the 22% tax bracket. It makes total sense.

[C]

Yeah. And you know, a couple, couple more of my thoughts as to even why that makes even more sense is being at age 42, chances are you'll make more money over the next 20 years. Right. You know, and so plus tax rates are lower right now than they have been historically. Will they continue? Maybe, maybe not, who knows? But it's, it's a good tax rate and you're young enough that you'll probably make more money later, maybe be in higher tax brackets. So. So yeah, I would definitely go. The Roth option. I wouldn't do. I don't think you need to do any Roth conversions, but just start, start funding the roth with current 401k contributions. That's what I do.

[B]

What do you think? Should he ramp up some savings?

[C]

Oh, when he pays off the debt.

[B]

Yeah.

[A]

Or coach.

[C]

Well, if it were me, and they love to travel and I like to travel too, so I get that. I would go 50, 50. I would take that extra savings and then I would travel and whatever on half of it and the other half.

[B]

I would imagine there's going to be increase in income.

[C]

Yeah, well, for sure. Right. I'm just saying if I really want to retire at 60, then I. Then I want to kind of supercharge this a little bit more. So that, that would be kind of my thinking on that one.

[B]

Cool. All right. Yeah, I would, I think coast mode is. I wouldn't say coast mode, but let's say he doesn't have to put a lot of gas on the old fire.

[C]

Yeah, I think. Right. And that's kind of, I think, a good way to think about your career anyway, which is every time you get a raise or bonus, you can increase your lifestyle maybe half. Right. Maybe it's a different figure. But increase it some. But save more as. Because, Joe, you and I have seen this many times. People make more money, they spend more, they make more money, they spend more and then they get to retirement age and they don't have much to show for it except an expensive lifestyle.

[B]

Yeah, I know that you have some experience with it. I do have some. Not me personally, just been in the business 25 years.

[C]

Got it.

[B]

That's called. What is that? Style creep.

[C]

Yes. Yeah.

[A]

Lifestyle creep.

[B]

Lifestyle creep. Yep. Yeah.

[C]

Yeah. Okay.

[B]

Okay. Yeah, I think TLC sang a song about that too.

[A]

Oh, really?

[C]

Okay.

[A]

And so I creep.

[C]

Yeah.

[B]

Yep. There you go. Okay, we got Phil and Claire from California. Hey, Joe, Big Al, andy. We're both 48, would like to retire at 60. We make about 30, $400,000 per year. My Social Security income at age 67 will be 50K. My wife is not eligible to collect Social Security, but she will have a COLA pension at $60,000 per year beginning at age 62.

[C]

Wow. Okay.

[B]

As we head down the home stretch, we want to make sure that we are saving enough and we're putting our funds in the right types of accounts. Our funds are aggressively invested in a 9010 stock bond type index portfolio at Vanguard. Our jobs are very stable. And my only concern when the market drops is that I don't have enough cash to buy more stocks. We max out our 401 and 403 accounts every year. We also actively trying to build out our taxable account. In total, we're trying to save about $100,000 per year. Here's the total funds. Tax deferred 1.2. Roth 450 Taxable $225,000. Total $1,900,000. Question 1. Based on the back of the envelope calculations, I'm guessing we could get a 5 to 7% return and have about 5 to $6 million at 60. But getting a spitball from you would be nice. If we can hit our savings goal, we'll be able to retire at $60,000 and spend $150,000 per year. All right. How old are they?

[C]

48. They got 12 years.

[B]

12 years. They're paying $100,000 a year and they got close to $2 million.

[C]

That works. And so here's the math that I did. So you start with 1.9 million, right. And then I just added 75,000 per year because they said they're trying to save 100,000. So let's be a little conservative. Let's go 75,000 savings, 6%. 12 years. Pretty conservative rate. $5 million. So I'm agreeing with this. 5 to 6 million.

[B]

3% of 5 million is 150.

[C]

And then you look at spending 150. At a 3% inflation rate at 12 years from now would be 214,000. Divided into 5 million would be 4.3% distribution rate, which is at 60. It's maybe just a little High, but not bad. Especially when you consider she'll get a pension in two years.

[B]

Of 60 grand.

[C]

Of 60 grand. You add that in and now you're at a 3% distrib. So, yeah, it seems just fine.

[B]

I really would like to have more Roth money to optimize taxes in retirement. Being in a high state tax is a bit painful and we've enjoyed paying less taxes now. But I wonder if we should be investing in a Roth version of the 401 and 403. Should we shift our pre tax retirement contributions to Roth or should we keep investing in the pre tax accounts to do Roth conversions in retirement? Thanks for all you do for this community. For the community, Al.

[C]

Yeah, we're community service. Right.

[A]

It's the personal finance community.

[B]

Yes. We really enjoy the show.

[C]

Yeah.

[B]

I would switch to Roth. Phil. Phil and Claire. Is that like a little catchphrase? Any catchy names there?

[A]

That is from. Yes, that is from. Oh, what is it? Modern Family.

[C]

Oh, yeah, that's right. Okay, I got that.

[B]

Modern Family. Never got into that one.

[C]

Yeah, that's actually a pretty good one.

[B]

Is that with Ted Bundy?

[C]

Yeah, got it. Yep, got it. He married. What's her name? Sophia.

[B]

Oh, yeah.

[C]

In the show.

[B]

Okay.

[C]

Not in real life.

[B]

Got it.

[C]

Yes. $395,000 per year. Great income. But that's in the 24% bracket. We kind of like that for Roth contributions. So I agree with you. I'd switch to the Roth contributions there.

[B]

Switch the Roth.

[C]

And then, you know, think about this. At age 60, you got a lot of time to convert the rest of your dollars into a Roth IRA at lower tax brackets. So that's when I'd be thinking about Roth conversions personally.

[B]

A lot of money on this show.

[C]

Yeah.

[A]

Your money, your wealth. Imagine that.

[B]

A lot of successful people.

[C]

Yeah, I was just waiting for the people that had 11 million to say, can I retire?

[B]

Yeah, can I retire $100,000?

[C]

And then we'd get about 25 comments. You only talk to people about people that have a lot of money.

[B]

Yeah. How about, you know, you know, I met. I met Ken and Barbie.

[C]

Ken and Barb. Barbie.

[B]

Yep. Remember them? No, they were. And I screwed up the question because it was like they had millions and it was like. And I thought they said I wanted to spend $20,000 a year. Oh, it was actually 20,000amonth.

[C]

Well, see, okay, I do remember it. And I think that's what I said. Let's assume that.

[B]

I think we did assume.

[C]

Yeah, yeah.

[B]

Very nice people. How'd you meet them people track me down. Kevin Barbie.

[C]

Okay. Well, that's pretty good.

[B]

Yeah. Anytime any of these. Our listeners find me.

[C]

Yeah, they can find.

[B]

You know where I work.

[C]

They put in. They put it. Yeah, they do know where you work. They can just stand outside the building.

[B]

Like, just getting, you know, ask for me and give him a real life spitball.

[C]

Yeah.

[B]

All right. I'm tired.

[C]

Yeah.

[B]

Charleston, South Carolina. You ever been?

[C]

I have not. Was it good?

[B]

Yeah, it was a good time.

[C]

I'd like to go. I've heard good things. Yeah, it's great.

[B]

Yeah, I really enjoyed it. Stayed. Stayed at Kiawah island, though, which I thought was pretty close to Charleston, which is about an hour.

[C]

Oh, okay. So the closest I've been is Chattanooga, Tennessee.

[B]

Okay. I've been to Chattanooga as well, but, oh, the travels. You're traveling to Tahiti.

[C]

Yeah, next week.

[B]

Oh, man.

[C]

Yeah.

[B]

San Diego airport was no bueno.

[C]

I can imagine.

[B]

Well, hopefully a lot of people upset.

[C]

Hopefully the government's open by then and we have a problem.

[B]

Yeah, we had a couple hours.

[C]

I'm sure. At least you got. You. You made it.

[B]

We made it. It was foggy, though. I thought for sure they were going to circle and land in Ontario.

[C]

Yeah, right, right. So, yeah.

[B]

Yeah. All right, here we go. Another wonderful episode. Thank you, Andy.

[A]

Thank you both.

[B]

How's the weather in down under?

[A]

Let's see. At the moment, it's overcast and looks like it's planning on raining. We're going into, you know, we're in mid spring now, going into summer, so the temperatures are supposed to start ratcheting up as we get into Christmas season. Yeah.

[C]

Maybe even get hot at some point.

[A]

Oh, yeah, absolutely. Yeah. Yeah. We're getting up to like, 30 degrees. You can translate that, right?

[C]

That's about 82, 80ish, something like that.

[A]

I think A little bit more.

[C]

Yeah, a little more. 85. Somewhere in there.

[B]

30 degrees Celsius.

[A]

Celsius.

[C]

You have to be a world traveler to understand. She was talking Celsius.

[B]

Got it, got it, got it. All right, that's it for us. Thanks again for the questions. We'll see you guys. Next week's show is called you'd money, you wealth.

[A]

Next week on ymyw, we'll continue the Roth versus traditional conversation for Todd and Margot in Texas, who want to retire early at age 50. David asks for a retirement spitball for those not in the top.01%. Mia and Jesse in Seattle are hoping they can buy their dream lake house and retire Yosemite Sam in Texas wonders if he should pay off his lake house or keep his low rate mortgage, and Birdie and Bogey want to know if they can afford a $500,000 beach home and still retire early at 55. Join us next week, won't ya? You Money, you, Wealth is your podcast and this show would not be a show without you and your questions and your feedback like Gary sent us this week. Subscribe on YouTube, turn on notifications so you can see the spitballs as soon as they're available and jump into the comments where with me and tell me your thoughts on Roth conversions too. Send your friends a link and invite them to join us. Tell them we're over here making fun of finance every week on ymyw. And finally, leave your honest reviews and ratings for your Money, you, Wealth in Apple podcasts and any other app that accepts them like Amazon, Audible, Castbox, GoodPods, Pandora, Player, FM Podcast Addict and Podchaser. Your Money, you, Wealth is presented by Pure Financial Advisors. We are we are in the final month of 2025 and maybe you've been procrastinating making those last minute moves to lower your 2025 taxes. I mean, yeah, you can contribute to a Roth by April 15th of next year for it to count for this year, but a conversion? You only have four weeks and one day left. Click and tap the free financial assessment link in the episode description to schedule some one on one time with the experienced professionals on Joe and Big Al's team at Pure Financial Advisors. They'll help you craft your best strategy to save as much as possible on taxes, and they'll build with you the retirement plan that matches your unique needs and goals. Anyone can get a retirement spitball, but you're not just like anyone else and your financial plan shouldn't be either. Meet in person at one of our 14 offices around the nation or online via Zoom Right from home, call 888-994-6257 or click or tap that free assessment link in the episode description and schedule your free financial assessment today while there is still time. Pure Financial Advisors is a registered Investment Advisor. This show does not intend to provide personalized investment advice through this podcast and does not represent that the securities or services discussed are suitable for any investor. As rules and regulations change, podcast content may become outdated. Investors are advised not to rely on any information contained in the podcast in the process of making a full and informed investment decision.