💡 A Smarter Tax Strategy:

What You Need to Know About Roth IRA Conversions

When you think about retirement planning, most people focus on saving — but how you withdraw those savings matters just as much. One tax strategy we discuss often with clients is the Roth IRA conversion. It’s not right for everyone, but for the right situation, it can offer greater control over your taxable income in retirement and support your long-term goals.

🔄 What Is a Roth IRA Conversion?

A Roth IRA conversion is when you transfer money from a traditional IRA into a Roth IRA. You pay taxes on the amount converted now, in exchange for potential tax-free withdrawals later — assuming you meet certain conditions.

This strategy can make sense for people who:

• Expect tax rates to rise in the future

• Want more control over their future taxable income

• Are planning to leave a more tax-efficient legacy to their heirs

⚠️ Why Timing Matters

With the potential for higher federal income tax rates in the coming years —

due to increasing debt and deficit

spending — some retirees are exploring conversions while tax rates are still relatively low.

By paying taxes on your traditional IRA now, you may reduce the impact of Required Minimum Distributions (RMDs) later and possibly reduce what your heirs might owe in taxes on inherited assets.

📊 Hypothetical Example: Kurt & Connie

Kurt and Connie are 65 and planning to retire at 67. They expect to have around $1 million in a traditional IRA. After consulting with a financial advisor, they decide to convert $50,000 per year for five years from their traditional IRA to a Roth IRA.

Their reasons:

• Spread the tax impact over time

• Avoid ballooning RMDs in their 70s

• Give their heirs a more tax-efficient inheritance

By converting gradually, they may avoid jumping into a higher tax bracket and retain more control over how and when they pay taxes.

Note: This is a hypothetical scenario for illustrative purposes only. Results will vary based on personal income, tax rates, investment performance, and other factors.

🧬 What About Legacy Planning?

One potential benefit of a Roth IRA is that heirs can inherit the account without paying income tax on distributions, assuming the account has met the required rules. This can make it a valuable tool for those who want to pass along more to the next generation in a tax-aware way.

That said, Roth conversions aren’t always the best choice. They need to be carefully analyzed in the context of:

• Your income

• Future tax expectations

• Your timeline

• And how it fits into your full retirement plan

💬 Should You Consider a Roth IRA Conversion?

There’s no one-size-fits-all answer. A Roth conversion can be a smart strategy — or an unnecessary tax bill — depending on your circumstances.

At Hux Capital, we help clients evaluate this decision with real data, clear comparisons, and guidance tailored to your goals. We can help you understand:

• If a Roth conversion makes sense

• How much to convert (and when)

• And how it affects your retirement and legacy plans

📞 Ready to review your options?

Schedule a no-cost strategy session to see if a Roth conversion fits into your bigger picture.

👉 Book a Complimentary Strategy Call with our team here: https://t2m.io/DiscoveryCall

👉 Watch the Educational Video: https://t2m.io/RothConversionsYT

Author: The Hux Team

This hypothetical example is shown for illustrative purposes only and is not guaranteed.

This information is provided as general information and is not intended to be specific financial guidance. Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives.

Investment advisory and financial planning services are offered through Simplicity Wealth, LLC, an SEC-registered investment adviser. SEC registration does not constitute an endorsement of the firm nor does it indicate that the adviser has attained a particular level of skill or ability. Insurance, Consulting and Education services offered through Hux Capital Management is a separate and unaffiliated entity from Simplicity Wealth.