Dave Ramsey Is Disastrously Wrong on Roth Conversions
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- Опубліковано 19 чер 2024
- There's very little I agree with Dave Ramsey on, especially Roth Conversions. In this video, I analyze what Dave Ramsey has stated regarding Roth Conversions and how many details he is excluding that costs people hundreds of thousands of dollars.
0:00 Intro
0:45 Tax Brackets
3:50 Paying Taxes on Roth Conversions
6:25 The Five-Year Rule
8:09 Summary of Dave Ramsey Roth Conversion Statements
9:12 Conclusion
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Dave Ramsey's good at advising people on how to get out of debt. On investing...not so much.
EXACTLY!!!!
Yes this is what I found myself.
Great advice. I realized I was getting myself into a tax liability with my Trad IRA and My 457B plan about 3 years ago. I had a big winner in Tesla stock in 2020-2022. My deferred accounts went way up over 1.2M. I had saved for 30 years at work in a 457b and for several years in my own Roth IRA. Suddenly I was forced to retire because of Covid mandates. I started making large Roth IRA conversions about 3 years ago. This year was 300k, next year will be my last year doing 228k. I am so happy I woke up and realized what was ahead. I read your book and watched a couple videos recently. I was a state worker so I accumulated a large pension so I won't be in the zero bracket in retirement. But at least I have a multi million dollar tax free Roth account. Thanks
In addition to the 59-1/2 5-year rule, there is also a 5-year rule on NEW Roth accounts. The account must be OPEN for five years before money can be withdrawn. This doesn't apply to many but it is a potential gotcha. Yes, I was stupid enough not to open a Roth before retiring but it really doesn't matter much.
As far as tax rates, I don't see the 10 or 12% rates going up much. I don't see much of a political apatite for "taxing the poor". There is also huge jump in taxes for conversions at the $47150/$94,300 mark. I sure don't see the 12% bracket going up to 22%.
I have done some forward tax planning myself and also used an advisor and numbers show I should actually go into the 32% bracket last year and this year. I’m retired with a pension and cash available to pay the tax. But do you ever see a scenario where 32 % makes sense. I look at my total after tax net wealth not just taxes paid to make my conversion amount determination. I’m 60 years old. Thank you for the info you shared.
Dave didn't drop the ball. He was just making a point that you have to watch the brackets as you do the conversion. For some people taking advantage of the 24% bracket makes sense, and for other it does NOT make sense to use the 24% bracket. It depends on your IRA balance and income!. Lower income/balances will allow you to spread it out over time.
Why wouldn’t anyone want to take advantage of the 24 if they were already in the 22? 24 is still lower than 25 which is the future version of the 22.
@@DavidMcKnight I was just making the point that certain people might want to leave some money in a qualified account if they know they are going to have medical or LTC withdrawls, which drops or eliminates tax completely! I am converting 60-75%, but I am also leaving some in qualified accounts as a hedge for LTC/medical costs.
ALSO, people near the 15% bracket threshold might be able stay in the 15% bracket using various strategies (charity bunching etc), and spread the withdrawl over time to stay in the 15% bracket.
BUT I do agree the Trump Tax cut brackets are a gift that should be optimized, and that taxes are only going up, at least for the higher brackets....
AND back to the original point.... Dave was not giving comprehensive roth strategy, but rather emphasizing to watch the brackets as part of an overall plan. I think you "might be" Ramsey bashing a bit for the sake of your own channel ratings ;-)
@@kevinedward4195 👍
@@DavidMcKnight I do appreciate your insight. I don't think higher earners realize what a gift a 22-24% tax bracket is, but for those on the bubble there are other strategies to consider also.
I'm ok with the 10 and 12 percent tax brackets but it's a huge jump from 12 to 22% (83% increase!) that I'm not a fan of.
Yes that’s a difficult jump.
And this is why the middle class is always screwed when it comes to taxes@@DavidMcKnight
I did exactly this … filled up the 24% bracket… paid the tax in cash because I’m under 59.5 … it was hard to believe it was worth it but forward tax planning showed me that it would force me into higher brackets in the future if I we into early retirement with too much pretax $. Don’t convert too much but consider taking a look before 2025 ends. If I waited to retire to convert the tax brackets would at minimum 10/15/25/28 Vs 10/12/22/24.. 3-4% makes a massive difference when compounded over what I hope to be a 30+ year retirement.Good video. Everyone’s situation is different and it is very difficult to determine without really taking at look at all income sources and getting a handle on expected expenses. A planning software is a must.
Great comment
I came across Garrett Gunderson and his book "Killing Sacred Cows" and it started my mindset transition. One of the biggest differences between financially successful and unsuccessful is how they think about money and wealth.
Dave Ramsey teaches a budgeting "shrink your way to wealth" mindset vs an abundance creating more value mindset.
Great comment. I’ll have to check him out.
@@DavidMcKnight 30 years old. 100k in a old 401k plan. Should I convert it over the next two years. This would keep me in the 22% bracket.
@@timothyletkemanno just build up wealth in Roth and a Taxable Brokerage Account. Also if it's an older 401K at an employer just convert it over to a traditional IRS.
Aim to invest 25% of your gross income.
Great video!..I'm considering a Roth conversion now at 61 yrs old with $875k in a traditional pre-tax 401k contribution. I'll probably work til 65-67yrs old. I'm wondering if it's still worth doing, but taxes never go down, do they:) Though my question is that since I'll be retired and not making an income except drawing from retirement accounts, won't my tax bracket be that much lower anyway?..and being that retirement is only 5-7yrs away, would a Roth conversion make up the difference in what I'll pay in taxes now?
Ask Dave
The 24% bracket is the sweet spot for sure. But it is better to pay the tax with cash if you have it.
Thank you, sir! That was one of the most useful 10 minutes I have spent in my research on Roth conversions.
Glad I could help!
When you are retired you need $14K if single or $28% if married of TAXABLE income. That is your standard deduction and is taxed at ZERO %.
Currently $29,200 or half that amount if you’re single.
Great video, thank you! I'm looking to change my Pre-Tax 457(b) to a Roth 457(b), but just want to make sure its our best option. I am in year 5 of a 30 year career (90% pension retirement, annual final compensation is our best 8 years and I expect a 5-8% raise every year). Given this, is it safe to assume I will be in a higher tax bracket at retirement than now, therefore Roth 457(b) is the way to go? Thanks!
I'd need to know what your income bracket is now, and what your pension is likely to be down the road given your pension. And, what if tax rates double like many experts are predicting? Generally, the father out your retirement date, the more the Roth accounts make sense.
@@davidmcknight8201 I am married file jointly 24% tax bracket, and my projected pension payout is about $7700 per month, after the 30 years of service. Thank you!!
The pre-tax 457(b) has $23,000 invested, should I also in-plan rollover that to the Roth 457(b)? I assume that will incur an income spike, but keep me in the 24% tax bracket, regardless.
What excellent kinda job is this? Does it pay or have the potential to pay 6 figures 🤔 🤑🤔
If you rollover a Roth 401k to a Roth IRA, can you withdraw that full amount tax free before 59.5 if you wait those 5 years? Or is this kind of thing only for trad 401k -> Trad/Rollover IRA -> Roth IRA
This article might help: smartasset.com/retirement/roll-over-roth-401k-to-roth-ira#
Good video. It is more complicated and individual, taking into consideration income needs, health and marital status, beneficiaries or charities etc. When I do the math, yes I will come out slightly ahead in my late 80’s/90’s and my beneficiaries come way ahead if I convert. But for the next 20 years, which are the ones I can enjoy and travel etc hopefully, I would rather not “pre pay” the tax for benefits far away and not likely to matter at that stage of life. As for the unneeded RMDs, I will invest them in a brokerage account, where I will not have a 5 year waiting period, can take advantage of capital losses during my lifetime, and my heirs get a step up in basis making it tax free to them.
No 5-year waiting period on the converted portion if you’re over age 59.5.
One downside of using converted IRA to ROTH funds to pay the taxes due on the conversion is those funds are effectively removed from the tax free protection of the ROTH reducing your ability to create more tax free wealth.
If you have other funds to pay those taxes, you will come out ahead by leaving those investment dollars in the ROTH and put them to work!
Sure it’s not optimal but Ramsey’s position is to not do it at all if you don’t have cash on hand. Most people pay tax on their IRA distributions out of the IRA itself eventually anyway through withholding. It’s better than just letting it get crushed by higher taxes.
Yeah..l but writing that check to the irs from savings is hard. Ask me how I know😢
One of the most complicated parts is that conversion triggers all sorts of other financial actions. You can't do the modeling in a spreadsheet, you need a tool. I have used MaxiFi Planner and it seems pretty good. You set everything up (including presumptions on future tax brackets) and see how much you will have to spend across your life. Then you put in some conversions, see what the impact is.
I really wish it optimized it for you, but it doesn't, you have to use trial and error. But it's way more accurate than a spreadsheet and way cheaper than hiring someone to optimize it for you.
Thanks Bob.
You can model it in a spreadsheet. It is hard and you are pretty good with spreadsheet to do it. My version had macro resolving the annual taxes and other functions and the spreadsheet solution is very iterative to make sure the savings accounts didn't go negative.
Great video David. I paid the taxes for my first two Roth conversions with money from my savings. For my future conversions, I'll need to pay some of the tax from the IRA. For example, if I convert $100,000 in a 24% tax bracket ($24,000), would I be taxed $24,000 on the $100,000 converted and also be taxed another $5760 (24% of $24,000) on the $24,000 for total tax $29,760?
If you want to net $100k after tax then just divide $100k by 1-.24. That means your total withdrawal would have to be $131,578.
Thank you. So if I elect to have the $24k deducted from the IRA I'm converting, the $24k will be withheld for taxes and $76k will end up in the Roth IRA. And just the $100k is taxable and not the $100k and then $24k?@@DavidMcKnight
@@lewisautomaticThat is correct. Only the 100k is taxable, the amount withdrawn. You did not withdraw $124k so just the 100k is taxable income.
You’re soooo right. Dave is preaching to the financially unsophisticated. Sadly, that’s most of the population. So basically, Dave has designed his advice to appeal to most people. But you’re also right, one size doesn’t fit all.
Ramsey is not for me.
Thanks for your comment!
I have 40k in a trad tsp and I’m 38, is it better to split it 20k/20k over 2 years or just do it all in one year? I can pay cash most likely
Depends on your current tax bracket.
This is an interesting take. I am in my 30s and put money in a traditional 401k and Roth IRA (max both). I am single and in the 24% bracket. The taxes I save by using 401k get added to my brokerage account investments. While they are not tax free, they will only apply to capital gains instead of income when I sell them. As someone looking to retire much earlier than normal (45-50), is this an unwise strategy? I am thinking I could wait to do Roth conversions in my early retirement when I am only taking from my brokerage or possible rental property. My taxable income would be much lower and I could start to do conversions at that time.
hello
I am not a financial adviser, and this is not financial advice. My experience is that maxing my 401k was one of the larger mistakes I made. Here's what I wish I had done;
1) invest up to the company match in my 401k
2) max out my roth
3) max out an HSA if you qualify.
4) Invest the rest in a standard brokerage account. (this assumes you are a buy and hold type of investor, and that you do NOT have a ROTH 401k available)
Here's why;
1) The company match is worth the taxes you MIGHT have to pay.
2) ROTH is tax free at retirement, and can be used without penalties or taxes within limits before retirement.
3) You're gonna have health care expenses, and why not pay the tax free?
4) There is NO long term capital gains tax on your first $89,250 of GAINS PER YEAR (if you're married). This is MUCH better than a traditional 401k tax treatment.
So, during retirement, I'd draw nearly 30k per year from my traditional 401k. This would be tax free because of standard exemptions. Then, I'd take out about 60k of GAINS from my brokerage account that would also be tax free. If needed, I'd pull additional money from my ROTH, and of course pay my medical with the HSA. This gives me a tax free income in excess of 100k per year if I've made good investments.
@@mnotlyonExcellent!
Why do you think tax rates are going to double in the next 20-30 years?
$239 T of unfunded obligations for SS, Medicare and Medicaid.
@@DavidMcKnight over what time horizon does your number cover? The Cato Institute projected 80T over the next 75 years.
Excellent advice!
Appreciate this education. Where can I find your investment advice for people in their 30s and 40s who only have a mortgage with no other debt?
Have you ready any of my books like The Power of Zero?
@@DavidMcKnight I listened to both Power of Zero and Tax-Free Income for Life. I will need to reread them, as I’m just getting started with investing and a bit overwhelmed with understanding where exactly to begin.
@@Persto1208 You may want to try The Volatility Shield as well. More appropriate for your age.
First, thank you for the video. For years, I have been paying cash for my Roth 401k and Roth 457 conversions when I do my annual taxes. I'm not quite 59 1/2 years old. I contacted my 401k administrator, Empower. They said that regardless of age, that they not withhold the taxes from the conversion and therefore I would still have to be paying cash for the conversion. Am I missing something?
Unfortunately you must always pay the tax on a Roth 401(k) conversion out of a separate account. Your administrator is correct.
@@DavidMcKnight Yes. But the separate account would be a savings account. Hence, it is cash. Isn't this what Mr. Ramsey is saying. I appreciate your expertise and assistance.
@@dtovar2 Ramsey is correct when it comes to doing a Roth 401(k) conversion AND a Roth conversion prior to 59.5. However, once you get past 59.5 with a traditional Roth conversion, there is no such requirement, and he doesn't make this distinction.
My Question: I am maxing out my Roth IRA as well as my Federal Government TSP Roth. I am also over 61 years of age. Can I convert my Traditional TSP into my Roth TSP at anytime?
Thrift Savings Plan does not currently allow conversion from traditional TSP to Roth TSP. $8k Roth IRA + $30.5K Roth TSP is a chunk of change!👍
I came here seeking clarity and ended up more confused than before. The part about only 5% of people being able to pay their tax bill on the conversion with cash doesn't make sense. Your example seems to have someone trying to convert the entire $1M all at once. Ramsey doesn't tell people to do that. He recommends one bite at a time maximizing the lower tax brackets. The other consideration that I have to figure in is our 7% state tax which takes another sizeable chunk. I need to boil it down to a simple equation I can work with
Example: If you want to convert $1 M over the next 10 years, you would need to convert about $130k per year (assuming your IRA is growing.) That means you'd have to have available liquid cash of $30k to $40k per year. If you only have $100k in cash, and that's serving as your emergency fund, it's just not enough to pay the tax for each of those 10 conversions.
You can't boil it down to a simple equation because there is none. This is a complex problem that is very dependent on your own personal situation. It's called "personal" finance for a reason. Get you a good CFA and CPA to work with you in order to come to an optimum solution.
The problem I see with Roth conversions is if you convert at 22 or 24% then your effective tax rate at retirement is around 15%. RMD’s kick in and that might bump you up to around 20%. It ends up being about a wash.
Good comment. These types of conversions begin to make sense if you believe that tax rates, as many experts, predict, will rise dramatically in the coming years.
I’d only convert if I was pre social security and have quit work. We already have enough in Roth and brokerage accounts anyway
I agree with Dave about 90% of the time. What Dave is usually missing and you didn't get into it either is the process for deciding how much to convert if at all. I'd start by generating a forward looking Tax Plan. Then I'd model conversions to see how they changed my after tax net worth (ATNW) at my life expectancy ( I used age 85). In my ATNW, I devalued the Traditional IRA by 17% [ 12 % Fed tax + 5% state tax] to account for the fact that you can't get it without paying taxes on it. Your devaluation rate may need to be different, I would use your current tax brackets or the next one up. I'd start the process by maxing out the current level of Tax Bracket to see how that affected my ATNW and keep going until I maximized the ATNW. If you are both spreadsheet and financial savvy, you can do it. Else, you'll need help.
I discuss a lot of this in my upcoming book The Guru Gap.
So for someone like myself who makes 350K per year, 52 years old, have 1.3 million in 403B/IRA accounts (contribute the max amount every year), high risk return strategy, plan on working at least another 10 yrs, have 170K in a brokerage account also in high risk return strategy (adding approximately 36K per year), 100k in a money market account, expecting $4500 in social security per month at 65 for both of us, and will have a pension that pays $3000 per month (which I will start receiving at age 54), should I start contributing my annual 403B money to the Roth 403B plan at my work and build that account for the next ten years? Currently my employer does not match any ROTH contributions. When my financial advisor (Raymond James) did future projections, at some point because of my RMDs, it had me projected to pay upwards of $140,000 in TAXES some years! I'm concerned that I don't have more assets in the "tax free bucket".
I think you have good reason to be concerned. It would be hard for me to give you a recommendation without knowing all the information but if you want to go to my website davidmcknight.com we can discuss some solutions.
First, $100,000 isn't an emergency fund. That's an emergency fund plus a lot more for savings. Second, Ramsey never says to always just blindly convert EVERYTHING all at once to ROTH, but rather convert more manageable, smaller amounts each year as you can afford to pay the taxes. So maybe only convert $10k per year if that's what you can afford, for example. Oh, and I literally just watched a video before this one where Ramsey was onboard with a 65 year old guy converting his existing 401k to ROTH. So you either don't actually watch Ramsey, or you don't understand what he is saying. Either way you are definitely NOT qualified to be criticizing him. Just saying.
Thanks for your comment. I actually specialize in Roth conversions and have written books that have sold over half a million copies on the subject. Dave Ramsey is all over the map on Roth conversions. Watch the video--he makes a number of factually inaccurate statements on his website and gives arbitrary reasons that misinterpret IRS regulation for why one should not consider doing a conversion.
Great explanation.
Thanks!
You may want to put a windscreen on your mic.
Indeed. Sometimes those unexpected gusts come out of nowhere.
I think you are missing a key part. Dave said they have 100k in the Traditional IRA. So yeah it makes sense to convert about 71k this year and the rest next year to stay in 22% bracket. You would have been right to convert the whole thing in the 22 and 24% brackets ONLY IF it was the year 2025 and you knew the brackets were going up in 2026.
If these are the only tax-deferred assets they have (we don't know for sure), you would be 100% correct.
It’s 5 years from which you 1st opened a Roth account, correct? Not from the day of the actual conversion?
That's true for regular contributions. But each conversion has its own 5 year clock.
At the 5 minute 35 sec mark you say Dave Forbids you to do the Roth Conversion unless you have cash. I don't think you are correct with that statement. I just watched a video where he told one of his callers that it is perfectly okay to do the Roth Conversion and pay the taxes with part of the conversion but it is "Even Better" to do it if you have the cash on hand to pay the taxes.
Then he has an inconsistency with his message because that’s what he states on his website.
Tax rates don’t feel low.
On the 5 Year Rule, I think Dave Ramsey also missed, if you have had a Roth IRA for more than 5 years, and are over 59 1/2, then you don't have to worry about the 5 Year Rule for Roth Conversions. "The second rule applies specifically to Roth IRA conversions and whether the 10% early distribution penalty hits pre-age-59½ payouts. This five-year rule doesn’t apply to new contributions to Roth IRAs but to conversions of pre-tax income from traditional IRAs to Roths. Under this rule, if someone under age 59½ does a Roth conversion, and later takes a distribution within five years of the conversion and before turning age 59½, then the amount of conversion principal that is withdrawn is hit with the 10% early distribution penalty. Once you turn 59½, you needn’t worry about this five-year rule, even if you take a payout before your conversion meets the five-year period."
There’s another 5-year rule you have to worry about if you do a conversion and you’re over age 59.5 and 5 tax years have not elapsed since your first Roth contribution or conversion. In that case you would owe tax on any growth you experienced on converted dollars.
@@DavidMcKnight I already knew about the age of the Roth. Wife and I both opened up Roths when I was 43 and she was 40. So I just sort of blot out that 5 year rule, totally N/A for us.
Only one question Dave, with all the crushing regulation we advisors have to function under and the consequences of even minor errors being fairly severe, where is the accountability for Dave Ramsey when his followers are damaged by his advice?
I think accountability is coming soon given the Time Share Exit Team lawsuit…
@@DavidMcKnight Good to hear. Eventually the chickens come home to roost.
Hello, I was given the advice to have a traditional IRA so I can take the deduction now and dont worry about taking RMD's and paying the taxes later, bla bla bla. Basically I have had no financial advice ever from parents growing up, and what little I had turned out disastrous....i'll spare you the details. I've turned things around myself. My situation is I'm single, age 57, my IRA is approx 70K market value. I have other money in individual brokerage and a 401K from my employer. I don't own a house I rent, and find myself completely priced out of housing, which is another mistake but that's water under the bridge. I am planning to get married next year. My wife to be has small Traditional IRA as well about 35K. I'm in the 22% tax bracket, she is in the 12%. Bottom line is I know tax rates will increase in future, so it makes sense to do her Roth conversion now at her low tax rate before marriage. For my conversion I will remain in 22% tax bracket after marriage so it really doesnt change things. So my plan is do 100% of her conversion prior to marriage, regardless of painful tax burden for her, and then do a tolerable chunk of mine perhaps over 2 years. If you see any mistakes in my plan, please advise. Thank you!
Does she have any space left in her 12% bracket? For single people that bracket isn’t very big to begin with.
@@DavidMcKnight Hi David, thanks for reply. New subscriber here and getting your book to read. Yes she does have some space left in her 12% tax bracket, but not much, it looks around 5K.
24% taxes is 24% too high..
So many of his listeners ran out of money years in advance of life expectancy? Could you share where you got the data of this claim? I did read two of your books so I am curious, were you an insurance salesman previously? Also, interesting that I just started looking at your channel, and I’ve already seen you trash three well-known people. To each their own, but you might get a bigger following if you would just stick to your own content.
I’ve been selling insurance as part of a comprehensive approach to tax free retirement planning for the last 25 years. And the gurus I critique are typically the ones that dispense paint by the numbers, one size fits all financial planning advice that generally is not appropriate for the disciplined investor. Someone has to point out the deficiencies.
Ramsey does a lot of good. If he gets folks out of debt and saving money I can’t fault him too much. At that point you are probably savvy enough to get educated on the investment end. At least he is not a conman. What is a shame is the state of financial education… too many digging holes when they can’t afford a shovel.. a solid understanding of $ and taxation should be taught at schools… but then we would have a revolution and we can’t have that 😅
Thanks for sharing
I just did a Roth conversion, I'm 31 so for me it made sense since the money will be sitting there for 20+ years
As long as you anticipate your tax bracket being higher down the road than it is today, than you made the right move.
That will depend on the tax rate you paid now compared to what it will be in 20 years. The time it sits in a Roth does not matter. If the tax rates are the the same, it will be a wash.
@@nutria12247 Not really - any profits made on investments within the Roth can be withdrawn tax-free as well, so the time it sits in the Roth would matter if the money is invested wisely.
Dave I love your Crocodile Smile! 😇
Stop smiling Dave.... remember Mr Roper at Mrs Ropers flower arrangement class?
You are correct
👍
I don't really get all the outrage at DR. A quick listen to his show reveals that the vast majority are not thinking about derivatives, platinum futures or leveraged ETFs. No, they wanna get rid of the spouse, pay off a house or student loan or want advice on their child gone bad. We converted to Roth, paid the $70,000 tax over two years and have since made over $600,000 (tax free) trading actively with my financial advisor. The most important factor is a local FA who knows you and your details. A busy, disembodied person in some other part of the country won't cut it. I have lunch with my FA once a month just to catch up or gab about the kids.
Great job Dave
Thanks Chris! Hope you are well.
Why do you keep assuming that conversions need to be done all at once. Do it over 4-5 years while you're young!!
I’m a big fan of the 4-5 years. Who is saying otherwise?
That's fortunately what he's allow to get away with.
Yes, unfortunately.
@@timtoolman9940 Ok, so it continues to grow within the account, but to the IRS's benefit. Your portion gets bigger but so does theirs.
You'd have to be an idiot to convert a 1MM IRA all at once - you'd be in the 37% bracket. And if you pay the tax out of the Roth, you're reducing the balance of the IRA, which is stupid because one of the biggest reasons to do one is the future tax free growth - in your example, only 700k to grow tax free instead of 1MM. At 8% in 18 years 700k would be 2.8MM, 1MM would be 4MM.
No one is suggesting to convert a 1MM IRA all in one year. Furthermore are you suggesting that if you don’t have the cash to pay tax on a Roth Conversion, you should NEVER do it? You do realize that most people have tax withheld from their IRAs upon distribution which is essentially the same thing.
@@DavidMcKnight Then why do you say the taxes would be 300k? unless it's all at 24% and you live in a high tax state, the only way it would be 300k is if you went into the 32% or higher bracket. It's not 'essentially the same thing' at all. Presumably you are taking IRA distributions for living expenses so you can't avoid incurring the tax. If there's one thing people are less likely to do than pay tax on a conversion with outside cash, it's paying tax on a conversion, getting no disposable income out of it, and impairing future growth.
@@DavidsonFootball1 If you're in the 24% tax bracket in most states that have a progressive state income tax, you could easily be paying 6% state tax. So, that's an effective 30% on what you're converting.
One can't withdraw from a Roth for 5 years from the date the Roth was first established without a penalty... despite one's age.
If it’s a Roth contribution you can withdraw principal day 1.
Why are you talking so fast?!!! It's so annoying ,had to stop the video after 2min.
Well you missed out.
I had no problem listening to him. Hold on a minute, is this Senator Fetterman? Play it again with the CC on.
I have no idea who this guy is. Why should I pay attention to him?
Because I’ve sold 500,000 books on the subject?
@@DavidMcKnight Compared to how many sold by Ramsey? Not so many.
It’s easy to get attention by criticizing Ramsey. He’s the guy about whom most people know.
@@timmckee8287 Ramsey's books are about getting out of debt. Mine are actually about Roth Conversions and having a tax-free retirement. You asked the question. I'm just giving you the answer.
@@davidmcknight8201 Perhaps. Regardless, he has the name recognition and the audience reach. The issue is the drama of asserting he’s “dangerously wrong.”
Have a good one.
@@timmckee8287 He's sold millions of copies, way more than me, but they're all about getting out of debt, not Roth conversions. That's like saying you should follow J.K. Rowling's advice on Roth conversions because she's sold more books.
Ramsay's finanical advice is mostly for the very wealthy and most people listening to his podcast dont realize that. I couldnt agree more with Dave in this video that Ramsay makes content for a wide audence so his financial advice is too broad and useless to the average person. I personally think Ramsay just talks every day to make a buck regardless of the financial advoce.
My observation is that his advice is mostly for the poor and debt-ridden. Though I’m curious what evidence you might point to that he’s targeting the rich?
Ramsay's Advice is for the wealthy? I don't think we are talking about the same person.
Ramsay's best attribute is teaching people who live beyond their means to stop spending and get out of debt. This is the lowest rung of financial literacy and planning. I have never agreed with Ramsay's investment advice but his plan to get out of debt and start building is solid and has helped thousands.
One size certainly doesn't fit all. His advice is best and works for those at the bottom of the financial planning ladder. Once these investors get out of debt and get their feet under them, they can move on to more advanced techniques. Ramsay's failure, in my opinion, is that he does not acknowledge that his plan is elementary school and never graduates his listeners to the next level. I suspect this is purposeful to keep those on his program focused on the simple plan. It is possible that this level is all that some investors can handle. Unfortunately it's human nature to skip the basics and move on to advanced strategies. This would cause greater failure rate at the bottom for those Dave is trying to help the most.
Ramsey is so dangerous to our profession.