Here at Stonewood, we follow legislative developments closely. And this year, none has been more important to retirement planning than the One Big Beautiful Bill Act (OBBBA). (You can check out our analysis of the bill here, and our primer on the sometimes-confusing new tax deduction to offset taxes on seniors’ Social Security benefits.)
But one of the biggest takeaways from OBBBA is this:
Roth conversions are now too complicated for clients to execute on their own.
Today’s lower tax rates make it a great time to convert. But a properly-planned conversion now has to balance tax and IRMAA savings in the future against losing access to limited-time deductions today.
Stonewood’s Roth Done Right software balances it all and models out various conversion patterns to optimize the strategy.
I was glad to read an interview last week with one of America’s best-known IRA experts, Ed Slott. In his interview with ThinkAdvisor, he echoes many of the key points we’ve been sharing with advisors since the bill’s passage.
- Now is the time for many clients with larger IRAs to be looking at Roth conversions while rates are low.
- These low rates won’t last forever. The permanent extension is only “permanent” until Congress votes to change it (Stonewood has an entire package of seminar and lead gen content built around this concept of Legislative Risk – schedule a quick call with my team, and they can show you what we’ve built).
- Clients need to work with advisors who understand how to fit all the tax puzzle pieces together to achieve the best result.
Our clients are reading articles like this, too. With OBBBA shaping the current tax environment, they need guidance. Advisors who can analyze the various tax and IRMAA implications of a Roth conversion will be best positioned to serve U.S. savers – AND help them convert with confidence.
At Stonewood, we strive to make the complex simple. Stonewood’s Roth Done Right software is the absolute gold-standard for analysis that your client can actually understand. We’d love for you to see how it works – request a sample report here.
About the Author
Strategy expertise and training that actually moves the needle. Neil sees the big opportunities coming - and develops tools to let you take advantage of them.
