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Have You Heard of the ROTH Conversion Alternative?

Updated: Feb 13, 2023

Here’s a fact for you: Most are worried about their retirement income. Inflation and the bear market forced millions of retirees back into the workforce, and it served as a wake up call for those of us working toward our retirement years.

I’ve seen a lot of people considering a Roth Conversion and I want to talk about how that helps, and make sure you’re also aware of its alternative. First, let’s start with the basics:

What Is a Roth IRA Conversion?

A Roth IRA conversion is a process of moving money from a traditional retirement account like a 401(k), SEP, or other tax-deferred retirement accounts into a Roth IRA account.

Why Do People Use a ROTH IRA?

Many people are trying to retire earlier than in the past. The ability to access the funds in the account without penalty prior to age 59 ½ is more important now.

Withdrawals from a traditional IRA before age 59 1/2 are subject to a 10% penalty in addition to ordinary income taxes, but withdrawals from a Roth IRA can be made penalty-free at any time.

Another reason people are converting to ROTH IRAs is to avoid paying taxes during retirement.

Rather, you can pay taxes on your savings accounts now, and convert what’s left into a ROTH IRA. This way, you don’t have to pay higher taxes during retirement.

Why don’t you want to pay taxes in retirement?

Well, even if you intend to withdraw an income small enough to be in the lowest tax bracket, you’ll still be paying 12%+ on your withdrawals.

Remember: When these traditional retirement plans were invented decades ago, the goal was to avoid paying taxes in the present, with the expectation that taxes would be lower during retirement.

Historical data has shown us that many people end up paying an exorbitant amount in taxes during retirement and the rates certainly aren’t going down. Ever considered how high tax rates could be in the future?

What is a ROTH Conversion Alternative?

A Roth Conversion Alternative enables you to retain more of the value in your retirement plan and finance the taxes, leaving your whole nest egg intact.

For example, if you have an effective tax rate of 24%, and you convert $100,000 from your 401k to a ROTH, you will owe $24,000 in taxes.

That leaves only $76,000 in the ROTH IRA.

The Roth Conversion Alternative approaches this in a different way. Rather than paying the taxes out of your nest egg, we partner with a lender to pay them instead.

You may be wondering: why take out a loan when I have the funds now? The answer is very simple:

The interest earned on your full $100k investment offsets the interest expense on the loan to cover your taxes.

The details of how this works varies client by client, and we have proprietary modeling tools to show you exactly how it works specifically - using your savings figures and retirement goals.


Paying taxes out of pocket is always a tough pill to swallow. A Roth Conversion Alternative enables you to finance the tax, leaving your whole nest egg intact.

A Roth Conversion Alternative provides greater access to convert into a tax-free account.

If you’d like to learn about how a Roth Conversion Alternative works specifically within your portfolio, feel free to contact us for a custom model.

You can email me directly at or call 773-318-9608.



901 N Lake Destiny Drive, STE 380

Maitland, FL 32751


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