Unlocking the Benefits of Roth Conversions: Insights from Resolute Wealth Advisor

Roth IRAs can be powerful tools for long-term wealth planning. While direct contributions may be limited based on income, strategic Roth conversions allow you to shift funds from traditional IRAs into a Roth—unlocking significant tax, planning, and legacy advantages. 

Each of our advisors shares key insights on the advantages of Roth conversions. Watch their videos below for a deeper dive into how this strategy might fit into your broader financial plan. 

Tax Savings with Roth IRAs

Roth Conversions can help reduce your total lifetime tax burden. Here’s how:  

• Converting funds from a traditional IRA to a Roth IRA is a taxable event today—but may reduce your total lifetime tax burden. This can be especially beneficial when executed in lower-income years or before tax rates rise.
• Reducing traditional IRA balances can help you minimize future Required Minimum Distributions (RMDs), potentially keeping you in a lower tax bracket during retirement and avoiding unwanted taxable income.

Why that matters: 

When you turn 73 (or 75, depending on your birth year), the IRS requires you to withdraw a minimum amount out of your traditional IRA each year. These RMDs count as income and could push you into a higher tax bracket.

By converting a portion of those funds to a Roth IRA now, you lower your future RMDs—and since Roth IRAs don’t have RMDs, that money can grow tax-free without forced withdrawals.

Essentially, you pay tax on the conversion now (ideally when your income is lower), you reduce how much the IRS requires you to withdraw (and be taxed on) later, and you gain more control over your income and taxes in retirement.

Increased Flexibility & Control with a Roth IRA

Roth IRAs give you greater control over your income and taxes in retirement. 

Because Roths have no RMDs, you can decide when and how much to withdraw, allowing you to manage your taxable income more strategically. If you need to take a larger distribution in a given year, accessing Roth funds won’t increase your tax bracket like traditional IRAs might. This flexibility becomes a powerful tool when coordinating income, charitable giving, or unexpected expenses.

Plus, your Roth strategy doesn’t have to be all-or-nothing. Annual scenario testing can help identify optimal conversion amounts year by year.

When Is the Best Time to Consider a Roth IRA Conversion?

The best time to convert to a Roth is often during low-income years, such as during a gap between retirement and the start of Social Security or RMDs.

Market downturns can also create strategic Roth conversion windows. When account values are temporarily lower, you can convert more assets while paying less in taxes—then benefit from tax-free growth as the market recovers.

Benefits of a Roth IRA for Legacy & Estate Planning

A Roth IRA can also support tax-efficient wealth transfer to the next generation, making it a powerful estate planning tool. 

Beneficiaries can inherit a Roth IRA and continue to grow that inherited account tax-free for up to 10 years, enabling a decade of compounding with zero taxes on gains. This is especially impactful for heirs in higher tax brackets.

Roth IRA’s Role in Your Asset Location Strategy

A Roth IRA is an ideal vehicle for holding growth-oriented or higher-risk investments. Gains within a Roth IRA are never taxed, so allocating your most growth-oriented assets here can yield superior long-term results. 

When incorporated into your overall asset location strategy, this approach enhances after-tax wealth by placing the right assets in the most tax-efficient accounts.

Build a Roth Strategy That Fits Your Goals 

Roth conversions can offer meaningful benefits—from reducing your tax burden to enhancing retirement flexibility and supporting your legacy goals.

Our four-part video series dives deeper into each of these areas, giving you a clearer understanding of how Roth conversions may work for you.

Watch the series below, then connect with Resolute Wealth Advisor to build a strategy tailored to your long-term financial goals.

The views expressed represent the opinion of Resolute Wealth Advisor, Inc. (RWA). The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While RWA believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the RWA’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.