Episode 418: Is Converting Your IRA During a Market Crash Actually a Mistake?

When the stock market crashes, most people freeze.  Today, David McKnight explains why a Roth conversion may be one of the smartest retirement moves you can make while prices are down. Find out how to turn a market downturn into a chance to build tax-free income for the rest of your life. In this episode, David McKnight asks whether a stock market crash is really a better time to do a Roth conversion. Every time the market crashes, you hear the same advice from financial advisors: this is a great opportunity to do a Roth conversion. The argument goes like this: if you have $1 million in your IRA and the market falls 30%, you can convert while it's worth only $700,000, pay taxes on the lower value, and let the recovery happen inside your Roth IRA, tax-free. Is a market crash really a better time to do a Roth conversion? David's answer is "not really." To understand why, remember that your traditional IRA isn't one pile of money but two piles commingled in the same account: you...