The Roth Conversion Myth Most Financial Advisors Get Wrong
Release Date: 01/14/2026
High Earners: Stop Making This Roth vs. Traditional Tax Mistake!
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David McKnight addresses one of the most common questions he gets: “If tax rates are going to be dramatically higher in the future, shouldn’t I be putting every dollar into a Roth 401(k)?”. Moreover, people often wonder whether they should be converting as much of their IRA to Roth as quickly as possible. David is a firm believer that the current tax rates are as low as we’re likely to see in our lifetime. The U.S. has over $39 trillion in debt and it’s going to increase by two trillion per year over the next 10 years and over $200 trillion in unfunded obligations for Social...
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David McKnight kicks off this Power of Zero Show episode by stressing that, in his opinion, tax rates in the future are likely to be much higher than they are today. Why? Because the U.S. has a national debt that continues to grow at an alarming rate. It has hundreds of trillions of dollars in unfunded obligations for programs like Social Security, Medicare, and Medicaid. At some point, the Government is going to need huge infusions of cash to meet such obligations. The so-called “Widow’s Penalty” is a very compelling reason, David believes, to consider doing Roth conversions while...
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David McKnight discusses the Woman’s World article Suze Orman Reveals When to Buy an Annuity - and the One Question You Must Answer First. For years, Orman has warned investors away from annuities, often lumping them into the category of expensive financial products that enrich salespeople at the expense of consumers. David has been surprised by what the current views of Orman appear to be, completely in line with what David has been preaching for years. Orman’s analysis begins with a key consideration: annuities can be a helpful tool in retirement, but whether they make sense for you...
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In this episode, David McKnight addresses one of the biggest myths in retirement planning: once you retire, you need to dramatically reduce your exposure to stocks. The reason why most financial advisors recommend reducing stock exposure in retirement has very little to do with stocks and everything to do with sequence of returns risk. Sequence of returns risk is what happens when you’re forced to withdraw money from your investment portfolio during a market downturn. If the market falls 30% and you’re simultaneously taking withdrawals to pay for your living expenses, you’re locking in...
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A recent landmark study from BlackRock caught David McKnight – he shares what it was all about and why you should care in this new episode of the Power of Zero Show. For decades, Americans were told that if they simply contributed faithfully to their 401(k) and avoided emotional decisions during market downturns, they would have enough money in retirement. According to the BlackRock study, retirees who incorporated guaranteed lifetime income in the form of an annuity into their retirement portfolio experienced an average increase of 22% in potential retirement spending. That number became...
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Should I Do a Roth Conversion in my 60s?
The Power Of Zero Show
Today’s episode of The Power of Zero Show revolves around a question host David McKnight gets asked all the time: “Should I still be doing Roth conversions in my 60s, even if I’m already retired?” In short, David believes that you should not only do a Roth conversion in your 60s, it’s actually one of the most optimal times in your entire life to do it. When doing a Roth conversion, you’re choosing to pay the IRS its portion of your IRA now, on your terms, instead of paying it a much larger portion later, on their terms. That’s why Roth conversions don’t only make sense for...
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The 5 Most Common Objections to Roth Conversions (and Why They’re Wrong)
The Power Of Zero Show
David McKnight unpacks the five most common objections to Roth conversions and why they simply don’t hold up under scrutiny. The first objection has to do with people not wanting to voluntarily pay taxes before the IRS requires them to. While on the surface, postponing this may sound logical, it ignores a fundamental aspect: the state of the U.S. national debt. It has just passed $39 trillion, and it’s slated to grow by $2 trillion per year for the next 10 years, and $3 trillion after that. In other words, interest on the national debt is becoming one of the largest line items in the...
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How Roth Conversions Affect Social Security Taxes and IRMAA
The Power Of Zero Show
David McKnight dissects a topic that causes a lot of confusion for retirees and pre-retirees: How Roth conversions affect social security taxation and Medicare premiums (IRMAA). Some warn against Roth conversions in retirement as they can cause your Social Security to become taxable and could also raise your Medicare premiums. While that’s true, David believes that the long-term benefits of Roth conversions can far outweigh the temporary, short-term pain they can cause. In order to determine whether your Social Security benefits will be taxed, the IRS tracks the so-called provisional...
info_outlineDavid 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 eventually take the money out of the account.
David goes on to explain what happens as both piles grow and required minimum distributions kick in.
You may end up with the IRS’ pile being not just larger but taxed at a much higher rate too.
With a Roth conversion, on the other hand, your conversion translates into you carving out the IRS’ portion and handing it to them today – settling the bill while the balance is smaller and the rate may be lower.
There’s a key question David invites you to keep in mind when it comes to Roth conversions: “Is your tax rate lower today than it will be when you take the money out?”
The exploding national debt of over $200 trillion dollars in unfunded obligations for Social Security, Medicare, and Medicaid are going to require spending cuts, higher taxes, or some combination of the two.
Beware: the problem with most retirement plans is that they assume that tax rates will stay low forever!
David points out that Roth conversions aren’t about timing the market but about timing the tax code.
In other words, they’re about timing the advantage of known measurable tax rates today instead of gambling on unknown ones tomorrow.
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