Hi Jan,

This week wrapped up another Retirement Income Challenge, and I want to say thank you to everyone who took part. Nearly 500 of you completed a full retirement plan over the course of this week, which is no small thing. Building out an actual plan takes real effort, and seeing that many people follow through says a lot.

This week we're turning to a topic that comes up constantly in planning conversations: what a Roth conversion really costs. Most of the debate focuses on tax brackets, but that's rarely where the real cost shows up. Medicare premiums, the Net Investment Income Tax, and future RMDs all play a role, and the article below walks through why the right question isn't what bracket you're willing to pay, but whether paying it today makes your overall plan more efficient.
The Real Cost of a Roth Conversion
Few retirement planning topics generate more debate than Roth conversions. Some view them as one of the most powerful tax planning opportunities available. Others argue they’re frequently oversold, causing retirees to pay taxes years before they need to. Both perspectives have merit, but the problem is that they often focus on the wrong question.
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By Retirement Researcher
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The Number on Your Tax Return Is Not the One That Matters
Every April, retirees review their tax returns and arrive at a number that feels like a summary of their tax situation: their average rate. It is a tidy figure. It tells you what percentage of your total income went to federal taxes for the year. The problem is that this number looks backward. It describes what already happened. It says almost nothing about the cost of the next financial decision you make.
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By McLean Asset Management
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Episode 237

Should You Spend Your HSA or Let it Grow?

In this episode, Alex and I dig into listener tax questions, including whether a 40% effective marginal rate is too high a price to pay for a Roth conversion aimed at legacy planning. We also work through when it makes sense to start spending down a six figure HSA balance instead of letting it keep growing. 
LISTEN HERE