The 0% Capital Gains Strategy Retirees Are Using Instead of Roth Conversions

Roth conversions get most of the attention in retirement tax planning, and for good reason. But they’re not the only tool, and for some retirees they’re not even the best one. 

A provision in the tax code lets long-term capital gains be realized at a 0% federal rate when your income sits below a certain level. For retirees with appreciated investments in a regular brokerage account, the years between retiring and starting Social Security can open that window, and some are using it to reset gains at a 0% federal rate without writing the check a conversion requires, though it has its own trade-offs. 

In this video, I walk through how the 0% rate works, when it makes more sense than converting, when converting still makes more sense, and how to tell which situation you’re in. The honest answer is that it depends on your accounts, which is exactly why it’s worth understanding both tools before committing to either. 

If you’d like to talk about which approach fits your situation, book a discovery call with my team using this link.