Why Roth Conversions Make Sense After a Market Drop

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Why Roth Conversions Make Sense After a Market Drop

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When the market tanks, most investors freeze. But for those with traditional IRAs or 401(k)s, a downturn is actually a prime opportunity to convert those pre-tax dollars into a Roth IRA at a steep discount. In this episode, Lucas and Luna walk through the mechanics of a Roth conversion during a drawdown—using a concrete example of a $100,000 traditional IRA that drops to $80,000. They explain how converting at the lower balance means paying taxes on a smaller amount, locking in future tax-free growth, and avoiding RMDs. They also cover the tax-bracket math, the pro-rata rule for after-tax money, and why the five-year aging clock matters. If you've been sitting on the sidelines during this year's volatility, this might be the most valuable move you can make before year-end. #RothConversion #RetirementPlanning #TaxStrategy #MarketVolatility #TraditionalIRA #RothIRA #TaxFreeGrowth #RMDs #ProRataRule #FiveYearRule #FinancialIndependence #WealthBuilding #FexingoBusiness #BusinessPodcast #Finance #Investing #TaxPlanning #Retirement Keep every episode free: buymeacoffee.com/fexingo

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