Happy Friday Reader!
I just returned from a tax planning seminar this week, and one message was loud and clear:
We are living in a critical 8-year window of opportunity.
Here’s why:
- The current tax cuts (OBBBA) are scheduled to expire in 2033.
- At that time, Congress would need a majority vote to extend them — something that will be very difficult to pass, especially with the national deficit ballooning by nearly $1 trillion every 5 months.
- When these cuts expire, tax rates are almost certain to rise.
That means we have until 2033 to take advantage of historically low rates and newly expanded tax deductions — opening the door for some of the most efficient Roth conversions and tax planning opportunities we’ve ever seen.
The IRA “Tax Trap”
Traditional IRAs can create a chain reaction of taxes that erode retirement income:
- RMDs (Required Minimum Distributions) begin at age 73 or 75, forcing liquidation whether you need the income or not.
- That forced income can push you into higher tax brackets.
- Higher income can trigger IRMAA surcharges on Medicare (these costs are compounding at ~6% annually). Even a $5,000/year surcharge can snowball into $900,000 in unnecessary lifetime taxes!
- Your heirs inherit the tax liability too — with new rules requiring liquidation within 5–10 years, often at their peak earning years.
And here’s the kicker:
👉 All of this assumes tax rates stay the same.
But do you think tax rates will be lower, stay the same, or increase over the next decade… with $37 trillion of national debt and a deficit expanding by $1 trillion every five months?
The Opportunity
The combination of low tax rates today + expanded deductions under OBBBA creates a rare window:
- You can strategically convert IRA dollars to Roth IRAs at very low tax cost.
- Every dollar moved out of the IRA “tax trap” avoids future RMDs, higher brackets, IRMAA surcharges, and tax liability for your heirs.
- This is not an indefinite opportunity — it will likely close in 2033, and the math points to significantly higher tax rates ahead.
Overcoming the Biggest Obstacle
The number one reason most people hesitate to do Roth conversions is the out-of-pocket tax cost. Even when the math shows it saves hundreds of thousands over time, writing a large check to the IRS today is a major roadblock.
A select few companies in the financial industry have really found the sweet spot — creating a simplified, structured way to perform systematic Roth conversions with no out-of-pocket costs.
This is the most important breakthrough, because it removes the single biggest barrier that stops families from moving money out of tax-deferred IRAs and into tax-free Roth accounts. With this structure, conversions can be done gradually, strategically, and efficiently — all while staying within your target tax brackets.
Bottom line:
We have 8 years to act. By planning now, you can dramatically reduce your lifetime tax bill, protect more of your Social Security and Medicare income, and leave a larger, tax-free legacy for your family.
If you’d like to take a closer look to see if any of these key tax planning strategies might work as part of your overall Retirement Income Plan, then let's find some time to chat.
👉 Link to my calendar.
Sincerely,
Matt