How do Roth Conversion Ladders Work?| Debt Free Guys

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Can Roth conversion ladders be beneficial to me?

Want to retire early or delay taking social security as long as possible? Roth conversion ladders may help you reach these goals. Want to have more money in your pocket now? Start by getting rid of any credit card debt with the free 7-Step Credit Card Debt Slasher.

How a Roth IRA gives you more flexibility than a 401(k) or traditional IRA

We always say that credit cards are like swimming in the deep end when it comes to your finances. Well, Roth conversions and Roth conversion ladders are like swimming in a shark-infested ocean! And yet, Roth conversions and Roth conversion ladders can be extremely beneficial, especially for those of us who want to retire early.

That’s why we recommend talking to an accountant or financial services professional before you dip your toe in the Roth conversion waters. Brandon Clark is the financial planner behind Reexamine Wealth, a coaching practice designed to put DIY investors and entrepreneurs on the path to financial independence.

On this episode of Queer Money®, Brandon joins us to discuss the benefit of having a Roth IRA if you’re looking to retire early, describing how the Roth gives you more flexibility and control than other retirement accounts. Brandon explores how Roth conversions and Roth conversion ladders help us move money from a tax-deferred account to a tax-free one and explains the rules around withdrawing funds.

Brandon’s insight on tax consequences of doing a Roth conversion:

Topics covered on Roth Conversion Ladders

How Brandon discovered FIRE and what inspired his path to early retirement
The benefit of having a Roth IRA if you’re looking to retire early
How a Roth IRA gives you more flexibility than a 401(k) or traditional IRA
Why it’s important to have equilibrium among your tax-free, tax-deferred and taxable accounts
How much you should have in your Roth IRA before you start taking distributions out
How a Roth conversion allows you to move money from a tax-deferred to a tax-free account
The concept of a Roth conversion ladder and why you might want to create one
Brandon’s 4 questions for deciding how much to convert into a Roth IRA
Why Roth conversions make sense for people who want to retire early
The tax consequences of rolling money from a traditional IRA or 401(k) to a Roth IRA
Brandon’s top tips for a beneficial Roth conversion
Who would benefit from a Roth conversion ladder and why entrepreneurs are good candidates
Brandon’s role as a financial planner/coach for DIY investors and entrepreneurs

“What the Roth conversion allows you to do is to get money out of that tax-deferred bucket into that tax-free bucket.” - Brandon ClarkClick To Tweet

Connect with Brandon

Reeaxmine Wealth

Connect with David and John

Resources about Roth Conversion ladders

Roth Conversion Ladders for Early Retirement
Michelle Singletary at The Washington Post
Mr. Money Mustache
Tax Cuts and Jobs Act

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We’re David and John Auten-Schneider, the Debt Free Guys and hosts of the Queer Money® podcast. We help queer people (and allies) live fabulously not fabulously broke by helping them 1) pay off credit card debt, 2) become part- or full-time entrepreneurs, and 3) save and invest for retirement.

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