💾 Purchase the file created in this video here: ryanoconnellfinance.com/product/traditional-vs-roth-ira-rollover-excel-model/ 👨💼 My Freelance Financial Modeling Services: ► Custom financial modeling solutions tailored for your needs: ryanoconnellfinance.com/freelance-finance-services/
What do you mean by asymmetric returns? Does that just means returns from different assets? If so, you can follow the methodology in this video: ua-cam.com/video/XQS17YrZvEs/v-deo.html
@@RyanOConnellCFA thanks for replying, i have seen that video, i am looking for covariance matrix for downside deviations? I have calculated the downside deviations taking average as a threshold, but don't know how to calculate covariance matrix for that.
Great video that lays it all out by the numbers. I had a question - towards the end when you show the comparisons, it always looks like the Roth IRA remainder at 90 yrs of age is much lower than Traditional. Does that mean it is *better* to stay with Traditional and not rollover to Roth? I am wondering how to interpret the two scenarios where you show two what ifs by changing some parameters but each time Traditional IRA will have more left out. Am I interpreting the results correctly?
Ryan, I am also wondering if Standard Deduction should be incorporated in these sophisticated formulas. For 2024, the standard deduction amount has been increased for all filers, and the amounts are as follows. Single or Married Filing Separately-$14,600. Married Filing Jointly or Qualifying Surviving Spouse-$29,200. Head of Household-$21,900. This would actually lower Taxes annually on Rollover to ROTH Conversions especially those stretching from 56-90 years old to pay Lower Taxes for 35 Years (instead of 8 Years as in the video 1st example. These Standard Deduction would also help a bit on Original do nothing and remaining in Traditional IRA scenario. Additionally, Long Term Capital Gains Tax of 15% would help a great deal to reduce Taxes on Brokerage After Tax Account portion of their Income...
Ryan, I am just wondering if Post Tax Value on inheritance Traditional IRA would probably be close to Minus at Least 37% Tax and minus State Tax (example of CA or NY additional 10%... So it's closer to 50% Tax Cost on Inheritance of Pre-tax Traditional IRA to STIFF your Heirs with a Huge Tax Bills (especially that it must be distributed during 10 years and probably at prime earnings age for children and grandchildren due to Secure Act 2.0 which sadly decimated all financial planning by most of people who counted on 401k Stretch IRA provision for Inherited IRA or 401k (which was unfortunately not allowed since 2019 December due to Democrats change the 401k rules to get to charge Higher Taxes on those who saved). This 50% Tax on Inherited IRA should be planned unless this couple is leaving it to 12+ kids and grandkids or lives in no Income Tax on Traditional IRA or 401k (if there's such a State, we are all moving there very soon 😂😂😂. Also on Investment of Extra Income from RMDs you might want to subtract Additional Taxes and then with such higher Taxes eating out the After Tax non ROTH Brokerage Account PLUS HEAFTY IRMAA SURCHARGES (for MEDICARE High Income Tax like Penalties) this couple probably would be really benefiting from trying to convert their Rollover to ROTH by the time they reach their age 73-75...
Ryan, Just wondering, can this couple use Low Income Years or Lenghthier than 8 Years of Conversions from Current Age until Age 90 to pay Taxes on Rollover to ROTH Conversions more gradually and to try to stay within Lower Tax Brackets possibly to never exceed 24% Tax Bracket to increase the after Tax Value of Inheritance after Conversions? Why not set this as Constraints to stay within 24% Tax Brackets only while Converting Rollover to ROTH only throughout as many years as needed to never exceed their seemingly normal for $200k+ other Income 24% Marginal Tax Bracket? Why original goal was to convert everything in 8 years (is it to qualify for something or why would their goal was to convert everything within 8 years and to go Extra mile to be in 32% Marginal Tax Rate (and thus pay 8% Tax Brackets JUMP premium, while they could comfortably do it over so many more years?
Ryan, this is a great Spreadsheet and presentation. ❤ Thank you so much for the overview of the concepts and an example of Planning for Rollover to ROTH Conversions. But I noticed that it doesn't reflect the Sunset of Trump's Tax Cuts and Jobs Act of 2017, when Standard Deduction gets much lower and Tax Brackets JUMPING by 3 % for most Tax Brackets. Could you please comment on when these Tax Brackets are still Valid, is it including Tax Year of 2025 including which could then still be used for Rollover to ROTH Conversions with lower Taxes still? Hopefully you could update your invaluable spreadsheet for those future years most likely higher Taxes due to sunset of that really good law unfortunately (as it seems it's Democrats who want to repeal this Republican law in their efforts to raise Taxes). Also, about Bonds being part of the portfolio if we take Bonds Mutual funds for the past 5 years they would have decimated the growth of this portfolio, so it's not so trivial anymore whether affluent retirees would want to be stuck with more Bond during such proposed Portfolio Rebalancing.
Hi connell,can you plz guide me about how to make covariance matrix for asymmetric returns for downside risk in excel? I'm really stuck at this and have viva due tomorrow.😢
💾 Purchase the file created in this video here: ryanoconnellfinance.com/product/traditional-vs-roth-ira-rollover-excel-model/
👨💼 My Freelance Financial Modeling Services:
► Custom financial modeling solutions tailored for your needs: ryanoconnellfinance.com/freelance-finance-services/
Thank you Sir! Great summary and practice!
Glad you enjoyed it! Its my pleasure
Bro can you plz tell me about how to calculate covariance matrix of asymmetric returns?
What do you mean by asymmetric returns? Does that just means returns from different assets? If so, you can follow the methodology in this video: ua-cam.com/video/XQS17YrZvEs/v-deo.html
@@RyanOConnellCFA thanks for replying, i have seen that video, i am looking for covariance matrix for downside deviations? I have calculated the downside deviations taking average as a threshold, but don't know how to calculate covariance matrix for that.
I have calculated the covariance matrix 20 stocks, but that is for normal returns not for downside risk.
Great video that lays it all out by the numbers. I had a question - towards the end when you show the comparisons, it always looks like the Roth IRA remainder at 90 yrs of age is much lower than Traditional. Does that mean it is *better* to stay with Traditional and not rollover to Roth? I am wondering how to interpret the two scenarios where you show two what ifs by changing some parameters but each time Traditional IRA will have more left out. Am I interpreting the results correctly?
Can you incorporate MAGI cost as well and how it may affect Medicare Premiums Part B & D within your analysis?
Ryan, I am also wondering if Standard Deduction should be incorporated in these sophisticated formulas. For 2024, the standard deduction amount has been increased for all filers, and the amounts are as follows. Single or Married Filing Separately-$14,600. Married Filing Jointly or Qualifying Surviving Spouse-$29,200. Head of Household-$21,900. This would actually lower Taxes annually on Rollover to ROTH Conversions especially those stretching from 56-90 years old to pay Lower Taxes for 35 Years (instead of 8 Years as in the video 1st example. These Standard Deduction would also help a bit on Original do nothing and remaining in Traditional IRA scenario. Additionally, Long Term Capital Gains Tax of 15% would help a great deal to reduce Taxes on Brokerage After Tax Account portion of their Income...
Ryan,
I am just wondering if Post Tax Value on inheritance Traditional IRA would probably be close to Minus at Least 37% Tax and minus State Tax (example of CA or NY additional 10%... So it's closer to 50% Tax Cost on Inheritance of Pre-tax Traditional IRA to STIFF your Heirs with a Huge Tax Bills (especially that it must be distributed during 10 years and probably at prime earnings age for children and grandchildren due to Secure Act 2.0 which sadly decimated all financial planning by most of people who counted on 401k Stretch IRA provision for Inherited IRA or 401k (which was unfortunately not allowed since 2019 December due to Democrats change the 401k rules to get to charge Higher Taxes on those who saved). This 50% Tax on Inherited IRA should be planned unless this couple is leaving it to 12+ kids and grandkids or lives in no Income Tax on Traditional IRA or 401k (if there's such a State, we are all moving there very soon 😂😂😂. Also on Investment of Extra Income from RMDs you might want to subtract Additional Taxes and then with such higher Taxes eating out the After Tax non ROTH Brokerage Account PLUS HEAFTY IRMAA SURCHARGES (for MEDICARE High Income Tax like Penalties) this couple probably would be really benefiting from trying to convert their Rollover to ROTH by the time they reach their age 73-75...
Ryan,
Just wondering, can this couple use Low Income Years or Lenghthier than 8 Years of Conversions from Current Age until Age 90 to pay Taxes on Rollover to ROTH Conversions more gradually and to try to stay within Lower Tax Brackets possibly to never exceed 24% Tax Bracket to increase the after Tax Value of Inheritance after Conversions? Why not set this as Constraints to stay within 24% Tax Brackets only while Converting Rollover to ROTH only throughout as many years as needed to never exceed their seemingly normal for $200k+ other Income 24% Marginal Tax Bracket? Why original goal was to convert everything in 8 years (is it to qualify for something or why would their goal was to convert everything within 8 years and to go Extra mile to be in 32% Marginal Tax Rate (and thus pay 8% Tax Brackets JUMP premium, while they could comfortably do it over so many more years?
Ryan, this is a great Spreadsheet and presentation. ❤ Thank you so much for the overview of the concepts and an example of Planning for Rollover to ROTH Conversions. But I noticed that it doesn't reflect the Sunset of Trump's Tax Cuts and Jobs Act of 2017, when Standard Deduction gets much lower and Tax Brackets JUMPING by 3 % for most Tax Brackets. Could you please comment on when these Tax Brackets are still Valid, is it including Tax Year of 2025 including which could then still be used for Rollover to ROTH Conversions with lower Taxes still? Hopefully you could update your invaluable spreadsheet for those future years most likely higher Taxes due to sunset of that really good law unfortunately (as it seems it's Democrats who want to repeal this Republican law in their efforts to raise Taxes). Also, about Bonds being part of the portfolio if we take Bonds Mutual funds for the past 5 years they would have decimated the growth of this portfolio, so it's not so trivial anymore whether affluent retirees would want to be stuck with more Bond during such proposed Portfolio Rebalancing.
Hi connell,can you plz guide me about how to make covariance matrix for asymmetric returns for downside risk in excel?
I'm really stuck at this and have viva due tomorrow.😢
Just replied to your other comment :)
now be careful and not get hurt for undermining their position( people would charge for air nowadays(