Income Over Wealth

One couple, one $500,000 conversion, priced year by year to show why the same $100,000 costs about 30% at 63 and about 11% at 65

Show Notes

A couple both 62, with $1.2 million in a traditional IRA and $850,000 in a brokerage account, get one $500,000 Roth conversion priced out year by year. The same $100,000 runs about 30% at 63, about 11% at 65 through 69, and about 24% at 71, while the federal bracket at 63 and 65 is identical. What the conversion runs into is what sets the price. This episode follows the math from the first $50,000 through what the couple has left after tax at 92.

  • Why the first $50,000 converted at 65 costs $1,450 and the second $50,000 that same year costs about $9,900
  • The two ceilings that appear on no tax table: the marketplace subsidy cliff at $84,600 and the Medicare surcharge line at $218,000, which sits $28,900 below the top of the 22% bracket
  • Why most of the saving lands in the years after one spouse dies, and the five things that break the whole case

Take the free Retirement Income Roadmap (7 questions, about 30 seconds): incomeoverwealth.com/map

Watch this episode on YouTube: https://www.youtube.com/watch?v=IgZvX8hERgw

This episode is educational and focused on strategy and math. Always consult a qualified tax or financial professional before making personal financial decisions.

What is Income Over Wealth?

Retirement is an income problem, not a net-worth problem. Dan Wilson is a real estate investor, not a financial advisor. He buys and rents houses in Ohio, funds them with private money instead of bank loans, and built enough income from real estate to leave the Air Force. Twice a week, in about fifteen minutes, he works out how to replace a paycheck in retirement: where monthly income actually comes from, what each source costs you in risk, and how private lending works, including what to demand from any borrower. Every episode is also a video on YouTube. Free tools, the weekly letter, and every episode's notes are at https://incomeoverwealth.com. Educational only. Not financial, legal, tax, or investment advice, and not an offer or solicitation of any investment.