Welcome back to the Dollar Wise Podcast. In this episode, Andrew Barnhardt, CFP, and Brett Herron, CFP, take a deep dive into Roth conversions — what they are, why so many pre-retirees and retirees are asking about them, and when they do (and don't) make sense. Andrew and Brett walk through the core benefits of converting pre-tax retirement dollars to Roth, including lowering future required minimum distributions, creating a tax-free pot of money for large expenses, hedging against potential future tax increases, and leaving a tax-free inheritance to heirs. They also cover the practical side of paying the resulting tax bill, scenarios where converting may not be the right move — including charitable giving goals — and real examples of when conversions have paid off for clients. Throughout, they emphasize that Roth conversions are a personal, best-guess optimization strategy that should be made in coordination with a tax professional and financial advisor, not a one-size-fits-all recommendation.
Tune into this episode to also learn:
● What a Roth conversion is and how it differs from a regular Roth contribution.
● How Roth conversions can help reduce future required minimum distributions.
● The most tax-efficient ways to pay for a Roth conversion when it comes due.
● Why charitable giving goals can change whether a conversion makes sense.
What we discussed
● [00:00:31] Kicking off the episode: introducing today's topic, Roth conversions.
● [00:00:50] What a Roth actually is — after-tax contributions, tax-free growth, and tax-free qualified withdrawals.
● [00:03:27] What a Roth conversion is and how it differs from contributing directly to a Roth account.
● [00:06:54] Advantage #1: how converting to Roth can lower future required minimum distributions (RMDs).
● [00:09:13] Smoothing retirement income over time to avoid higher tax brackets and other income-based traps.
● [00:09:54] Advantage #2: building a tax-free pot of money for large or unexpected expenses.
● [00:11:46] Advantage #3: using conversions as a hedge against potential future tax rate increases.
● [00:13:11] Advantage #4: tax-free inheritances and gifting Roth dollars to heirs.
● [00:15:46] How to actually pay the tax bill on a conversion — cash, taxable accounts, and what to avoid.
● [00:19:16] Three scenarios where a Roth conversion may not make sense.
● [00:21:41] Qualified charitable distributions (QCDs) and leaving pre-tax IRAs to charity.
● [00:23:36] A real client example: how consistent conversions during low-income years changed one business owner's retirement picture.
● [00:24:13] Why peak earning years are usually the wrong time to convert.
● [00:25:49] Closing thoughts: Roth conversions are a personal decision based on your own goals, not trends.
3 Things To Remember
1. Roth conversions are about optimization, not necessity — they're rarely what makes or breaks a retirement.
2. Whether a conversion makes sense depends on your own tax bracket today versus your expected bracket later — not on trends or what your neighbor is doing.
3. How you pay the tax on a conversion matters — paying from cash or a taxable account is generally more efficient than withholding from the conversion itself.
Memorable moments:
(00:06:54) "Roth conversions are a way of moving some of that income forward into your retirement to lower your RMDs, therefore lowering the tip that you give Uncle Sam."
(00:11:46) "It's a hedge against future tax rate increases... if you convert money from pre-tax to Roth, you insulate yourself somewhat against some of those tax potentials in the future."
(00:19:16) "If doing a Roth conversion is going to hurt you financially for your retirement, it would be more necessary to not do it."
Useful Links
Connect with Brett Herron: [email protected]
LinkedIn: https://www.linkedin.com/in/brett-herron
Connect with Andrew Barnhardt: [email protected]
LinkedIn: https://www.linkedin.com/in/andrew-barnhardt-cfp
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HFM Investment Advisors, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. All investments involve risk and are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as a recommendation appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.
