GDS Unplugged Podcast

What are Roth Conversions and When Do They Make Sense? [Ep. 1]

Written by GDS Wealth Management | Jul 3, 2025 5:00:00 AM

View the full transcription of this episode here.

About this episode

Roth conversions can be a useful strategy for optimizing your retirement savings and tax strategy, but they come with their own set of complexities. If you've ever wondered whether a Roth conversion is right for you, you're not alone.

In this episode of GDS Unplugged, we dive deep into the intricacies of Roth conversions, breaking down what they are, why they matter, and how to determine if they're the right move for your financial future.

Whether you’re a financial whiz or an investing novice, you’ll find insights that can help you make sense of your present and plan for your future.

The Basics: What is a Roth Conversion?

A Roth conversion involves transferring assets from a traditional IRA, which is tax-deferred, to a Roth IRA, which is tax-exempt.

This process requires paying taxes at your ordinary income tax rate during the year of conversion. The primary benefit of a Roth IRA is that it grows tax-exempt, providing a valuable advantage over traditional IRAs.

Understanding Your Roth Conversion

Whether you're nearing retirement, planning for your future, or looking to optimize your tax strategy, this episode provides the insights you need to make informed decisions about financial planning.

  • Benefits of Roth Conversions: Learn why Roth IRAs may offer tax-exempt growth and how they compare to traditional IRAs.
  • Factors to Consider: Understand the critical factors such as age, income, long-term goals, and the purpose of the assets when deciding on a Roth conversion.
  • Medicare and IRMA: Discover how Roth conversions can impact your Medicare premiums due to the IRMA (Income-Related Monthly Adjustment Amount) penalty.
  • Gradual Conversion: Explore the benefits of staging Roth conversions over several years to manage tax implications and avoid IRMA penalties.
  • Financial Planning: The importance of doing the math and using financial planning software to analyze the benefits of Roth conversions is emphasized.
  • Required Minimum Distributions (RMDs): Learn about the rules for RMDs for both traditional and Roth IRAs and how they affect your retirement planning.
  • Inheritance: Understand the implications of inherited IRAs and the tax burdens they can impose on your heirs.

Resources:

Why Listen?

This episode is packed with valuable information and practical advice for anyone considering a Roth conversion.

Tune in to gain a deeper understanding of Roth conversions and how they can benefit your financial future. Don't miss out on this opportunity to enhance your knowledge and take control of your retirement planning.

GDS Wealth Management (“GDS”) is an SEC-registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. GDS does not provide tax or legal advice. You should contact your tax advisor, accountant, and/or attorney before making any decisions with tax and/or legal implications. This webinar contains general information that is not suitable for everyone and was prepared for informational purposes only. The examples provided are hypothetical and intended to illustrate general principles. The information presented does not take into account your specific financial situation and is not a substitute for individualized advice from a qualified professional. This webinar does not endorse any specific investment products, 401(k) plan providers, 529 plans, or financial institutions. The content is based on assumptions, theories, and principles that may not fully reflect an individual’s situation. Opinions and views reflect the judgment of the authors as of the publication date and are subject to change without notice. Past performance of any investment strategy or retirement plan features is not indicative of future results. Investments and retirement plan contributions may fluctuate, and there are risks associated with all retirement plan investments, including 401(k) plans and 529 plans. This webinar does not guarantee any specific financial outcome or return from participation in any retirement plan. Any discussion of taxes or tax advantages is based on current laws, which are subject to change. Listeners should verify the latest rules and limits for the current tax year. 

For additional information about GDS, including its services and fees, material risks and firm’s disclosures, please visit http//www.gdswealth.com/disclosures.