I’m not so sure how often this would work to advantage even with other variable factors constant. There is an obvious advantage to converting when value is lower. I have been telling myself for a decade now that I’ll do this when the opportunity presents itself. However, this sort of play has the same issues as any other type of market timing. The central problem being the overall trend of equity markets has historically been upward. You’re probably better off paying the taxes as you go, unless there is a tax advantage by deferring, and dollar cost average your way into the market. Trying to time conversion seems like a nice idea that is difficult to successfully execute in an advantageous way. At least that would be my hypothesis.
To Wit:
Pre-tax offers a hedge against a broad market downturn, because it lets the investor time a Roth conversion to when it is most advantageous
Statistics: Posted by upwind — Thu Jun 06, 2024 9:25 pm — Replies 9 — Views 674