June 28, 2023; Duration: 11:08
The biggest issue with Dave Ramsey’s view on Roth Conversions, and most of his advice in general, is his one-size-fits-all approach which costs his listeners hundreds of thousands of dollars. Dave starts off on the right foot by recommending people pay the taxes up front for a Roth Conversion but then veers off the track pretty quick. Dave breaks down a hypothetical married couple filing in 2020 doing a Roth Conversion, but makes the mistake of conflating the 24% tax bracket as a trap of the Roth Conversion strategy. If you have more than a million dollars in your IRA, you will never convert to Roth before tax rates go up for good without taking advantage of the 24% bracket. Dave then goes on to say that you should never do a Roth Conversion unless you have money sitting in cash to pay the taxes. If Dave’s advice were taken by everyone, only 5% of people would realistically be able to take advantage of the Roth Conversion. Some scenarios require you to pay cash for your Roth Conversio…
