Five Roth Conversion Myths Busted: What Most Americans Get Wrong
Release Date: 11/26/2025
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David McKnight addresses a myth floating around the financial world: “For a Roth conversion to make sense, you need many years for the Roth to grow so you can recoup the taxes you paid to the conversion.” David stresses why this way of thinking is fundamentally wrong – it’s built on the wrong assumption that all the money in your IRA belongs to you… when it actually doesn't. Remember: your IRA isn’t one pile of money but two piles sitting in the same account. One pile belongs to you, while the other to the IRS. What’s unknown is how big the IRS’ pile is going to be when you...
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info_outlineDavid McKnight busts some of the most common Roth conversion myths that are costing retirees hundreds of thousands – if not millions – of dollars over the course of retirement.
The “Don’t worry about Roth conversion, you’ll be in a lower tax bracket when you retire” myth is based on two flawed assumptions.
The first one is that your lifestyle will drop significantly in retirement, while the second is the one related to future tax rates being the same or lower than they are today.
David points out that, in retirement, people want to maintain their lifestyle. In some cases, they even spend more in early retirement (think travels, healthcare and helping with kids or grandkids).
Let’s remember that the U.S. national debt is projected to hit $63 trillion by 2035.
The country has unfunded obligations in Social Security, Medicare, and Medicaid that total over $200 trillion, and interest on the debt is going to crowd out most of the national budget items by the mid 2030s…
The primary value of a Roth conversion is that it pre-pays taxes at historically low rates to avoid paying them later when rates are likely to be higher.
Roth conversions not being binary, and the fact that you can get massive tax benefits without having to convert your entire IRA is another big myth David debunks.
David explains why you should voluntarily pay taxes instead of delaying that decision.
Ever heard of “If you don’t have cash to pay the tax, you shouldn’t convert”? It’s another myth David addresses in this episode.
For the millions of Americans who have most of their savings in tax-affirmed accounts, strategic conversions are one of the best ways to insulate yourself from the tax freight train bearing down on America.
Mentioned in this episode:
David’s new book, available now for pre-order: The Secret Order of Millionaires
David’s national bestselling book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement by David McKnight
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com