Episode 413: I Have $1 Million in Taxable Accounts and $1 Million in IRAs. How Can I Prepare for Higher Taxes?

If you've built up $1M in your IRA and $1M in taxable investments, David McKnight has a warning: every year that money stays put, the IRS gets to vote on your tax rate.  He breaks down a retirement planning strategy for gradually converting your IRA to Roth – fast enough to beat rising rates, slow enough to avoid painful brackets. In this episode, David McKnight looks at what you should do if you have accumulated $1M in taxable investments, and $1M in traditional IRAs and are concerned about the possibility of higher taxes in retirement.  He stresses that having money in IRAs is like going into a business partnership with the IRS – every year they get to vote on what percentage of your profits they get to keep… The solution to the IRA problem is relatively straightforward: start doing Roth conversions.  True, by doing so, you'll pay taxes on the conversion today, but you'll be doing so at near historically low tax rates. Remember: the key is to convert money slowly enough tha...