At 84 With $8M Saved, Are Roth Conversions Still Worth It?
An 84-year-old and his 77-year-old wife question whether Roth conversions make sense at their age with $8 million saved.
An 84-year-old investor with $8 million in savings is asking a question that more wealthy retirees are confronting: is it too late to benefit from converting traditional retirement funds into a Roth account? The man and his 77-year-old wife are weighing the tax strategy but remain unconvinced the math works in their favor given their advanced ages and already substantial nest egg.
The couple's hesitation extends beyond Roth conversions. They are also pushing back against paying a financial adviser the industry-standard 1%-2% annual fee, noting that 2% of their $8 million portfolio would run roughly $160,000 every year — a figure they find difficult to justify regardless of the advice quality on offer.
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The Roth conversion debate is especially pointed for older retirees because the core appeal of the strategy — years of tax-free compounding growth — shrinks with age. Conversions trigger an immediate tax bill, and recouping that upfront cost requires living long enough for the tax-free withdrawals to outweigh the initial hit, a calculation that becomes less favorable the older a retiree is when they convert.
For high-net-worth couples in their late 70s and 80s, estate-planning considerations can shift the calculus. Heirs who inherit a Roth IRA are not required to pay income tax on withdrawals, potentially making conversions a wealth-transfer tool rather than a personal retirement income play. Whether that benefit justifies the tax cost depends on the couple's specific estate goals, marginal tax bracket, and how much they intend to leave behind — factors a fee-only fiduciary adviser, rather than an asset-based one, could help them evaluate at a fraction of the cost the couple cited.
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