We hear it all the time. Roth this and Roth that. "Convert now before it’s too late" and many more. We think Roth conversions can be powerful in the right situations. But what most people don't talk about is that sometimes they may actually do more harm than good to your lifetime tax bill.

In this episode of Common Curiosities Retirement, Michael CFP®, EA discusses the conversation and explores the other side of the Roth conversion story. When he thinks they may not make sense to use.

Topics include:

💭 Why the upfront tax bill can matter more than the long term potential math

💭 Cash flow pressure and how Roth taxes actually often get paid

💭 When charitable giving can make pre tax dollars more powerful

💭 Why state taxes and future moves often get ignored

💭 Shadow taxes like IRMAA, ACA subsidies, capital gains, and hidden surcharges

💭 Life expectancy and planning for kids versus just yourself

💭 The irreversible nature of Roth conversions and timing decisions

Roth conversions could help you keep more money long term. They can also quietly trigger taxes and costs you did not see coming.

As always, stay curious.

𝐖𝐡𝐲 𝐰𝐞'𝐫𝐞 𝐡𝐞𝐫𝐞?

We’re here to make retirement planning feel less intimidating by helping people think through their strategies and plans through clear relatable financial topics!

💬 Questions or Want to Connect?

🌐 𝐖𝐞𝐛𝐬𝐢𝐭𝐞: www.custerfinancialadvisors.com

📧 𝐄𝐦𝐚𝐢𝐥: custerfinancialadvisors@lpl.com

00:00 Not Choosing Roth?

01:39 Why People Do Like Roth Assets

03:46 What is a Roth Conversion?

05:01 Everyone Has a Business Partner!

05:42 How Much Does the Government Allow?

06:36 Willing to Pay Tax Now?

08:07 Could You Get a Penalty?

10:07 Gifting Plans Affect Your Choice?

11:30 State Tax Effects!

12:55 How Many People Are You Tax Strategizing For?

15:06 Forgetting Your Shadow Taxes

16:24 65+ Extra Tax Deduction

17:09 The Irreversibility of Conversions

18:34 The Complexity of Roth Conversions

19:49 Youtube Disc. TN & Words.mp4

Disclosures:

Harborfront Financial Group is a Registered Investment Advisor registered with the Securities and Exchange Commission (SEC). Registration as an investment adviser does not imply a certain level of skill or training, and the content of this communication has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority.

The information contained in this material is intended to provide general information about Harborfront Financial Group and its services. It is not intended to offer investment advice. Investment advice will only be given after a client engages our services by executing the appropriate investment services agreement. Information regarding investment products and services are provided solely to read about our investment philosophy and our strategies. You should not rely on any information provided on our web site in making investment decisions.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Harborfront Financial Group, a Registered Investment Advisor. Harborfront Financial Group and Custer Financial Advisors are separate entities from LPL Financial.

This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing. All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Should you take your Social Security at 62 or wait? Some say it's a "no brainer", but is there really a “no brainer” age to take your Social Security? There's many moving parts to consider. Your choice should impact your retirement income, taxes you'll pay, investment strategy, health costs, inheritance, and many more.

Michael walks through this common retirement question. Michael has the unique skillset of viewing this choice from a financial planning standpoint as a CERTIFIED FINANCIAL PLANNER™, the investment angle as he has multiple investment designations, as well the tax side from his certification as an Enrolled Agent.

In this episode, we explore:

💭 Why we may claim early or may wait to take Social Security

💭 Break even ages and why they are helpful but not the full story

💭 How taxes, Roth conversions, and income stacking may change the math

💭 The earnings test

💭 Spousal and survivor considerations

💭 The real impact of permanent benefit reductions and delayed credits

💭 Why Social Security decisions should be coordinated with your tax and retirement strategy

As always, the goal is not to tell you what to do, but to help you think through your options to see what may fit you best.

Chapters:

00:00 Social Security a No Brainer?

02:10 Using SS as a Part of Your Complete Plan

03:30 When's Your Full Retirement Age?

05:11 Chart for Early vs. Late Claims

06:51 Reasons SS at 62 May Make Sense

09:21 SS Running Out of Money?

10:15 Guilt Free Spending?

11:09 Potential Roth Opportunities

12:24 Start Getting Some of Your SS Payments?!

13:03 Take SS & Invest?

14:49 Reasons to Wait on SS?

15:46 Earnings Test Explained

17:34 Tax Flexibility Potential

18:38 Effect on Health Insurance

19:12 Spousal Effects

19:55 Does Your State Tax SS?

20:24 RMD Planning, Income Stacking

21:16 The Tax Timebomb?

23:34 Strategic Distribution Planning

24:51 Social Security's Impact on Your Life

26:29 Youtube Disc. TN & Words.mp4

𝐖𝐡𝐲 𝐰𝐞'𝐫𝐞 𝐡𝐞𝐫𝐞?

We’re here to make retirement planning feel less intimidating by helping people think through their strategies and plans through clear relatable financial topics!

💬 Questions or Want to Connect?

🌐 𝐖𝐞𝐛𝐬𝐢𝐭𝐞: www.custerfinancialadvisors.com

📧 𝐄𝐦𝐚𝐢𝐥: custerfinancialadvisors@lpl.com

Disclosures:

Harborfront Financial Group is a Registered Investment Advisor registered with the Securities and Exchange Commission (SEC). Registration as an investment adviser does not imply a certain level of skill or training, and the content of this communication has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority.

The information contained in this material is intended to provide general information about Harborfront Financial Group and its services. It is not intended to offer investment advice. Investment advice will only be given after a client engages our services by executing the appropriate investment services agreement. Information regarding investment products and services are provided solely to read about our investment philosophy and our strategies. You should not rely on any information provided on our web site in making investment decisions.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Harborfront Financial Group, a Registered Investment Advisor. Harborfront Financial Group and Custer Financial Advisors are separate entities from LPL Financial.

This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing. All investing involves risk including loss of principal. No strategy assures success or protects against loss.

In this episode Michael, CFP®, EA tackles three big listener questions. 1. How should we save for kids beyond a bank account, 2. Whether a 26‑year‑old really needs life insurance, and 3. How much life insurance should a family actually carry?

Topic overviews:

💭 Investing money for kids

💭 Why a brokerage/Non-Retirement account could be a useful family planning vehicle

💭 Tax ideas that are available when parents gift investments rather than cash

💭 Does whole life insurance make sense?

💭 How much life insurance might your family need?

💭 Why layering term policies may help match your timeline and net worth

💭 The real conversation couples should have about life insurance before choosing an amount.

Great questions, hope you find this helpful!

𝐖𝐡𝐲 𝐰𝐞'𝐫𝐞 𝐡𝐞𝐫𝐞?

We’re here to make retirement planning feel less intimidating by helping people think through their strategies and plans through clear relatable financial topics!

💬 Questions or Want to Connect?

🌐 𝐖𝐞𝐛𝐬𝐢𝐭𝐞: www.custerfinancialadvisors.com

📧 𝐄𝐦𝐚𝐢𝐥: custerfinancialadvisors@lpl.com

Chapters

00:00 Michael Bugging His Wife

01:21 Little Known HSA Strategies

06:23 What to Know for Trump Accounts

08:10 How do you Claim the Money?

08:47 Hows' the Kids' Money Invested?

09:02 Family Planning Ideas for These Accounts

09:59 Too Good to be True?

10:48 Replacing Social Security Potentially?

12:00 Is It Fair to Other Kids/Families?

12:30 Dell Accounts. Kids & Family Qualify?

13:58 Thoughts on an Investment Plan

14:28 Not Spending Enough?

17:05 Reactions to $2 Million Retirement Plan

17:23 Influencer's Investment Plan for Retirement Make Sense?

18:45 What Could Be Our Highest Spending Power?

22:26 Sequence of Return Risk

23:38 4% Rule Matter?

24:30 Who May Want All Stocks in Retirement?

25:24 Youtube Disc. TN & Words.mp4

Disclosures:

Harborfront Financial Group is a Registered Investment Advisor registered with the Securities and Exchange Commission (SEC). Registration as an investment adviser does not imply a certain level of skill or training, and the content of this communication has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority.

The information contained in this material is intended to provide general information about Harborfront Financial Group and its services. It is not intended to offer investment advice. Investment advice will only be given after a client engages our services by executing the appropriate investment services agreement. Information regarding investment products and services are provided solely to read about our investment philosophy and our strategies. You should not rely on any information provided on our web site in making investment decisions.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Harborfront Financial Group, a Registered Investment Advisor. Harborfront Financial Group and Custer Financial Advisors are separate entities from LPL Financial.

This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing. All investing involves risk including loss of principal. No strategy assures success or protects against loss.