Mastering Multi-Year Roth Conversions: Planning for the Long Game

Bob covers the full theory, the three types of conversions, eight reasons to convert, the legislative pendulum driving urgency, the widow’s tax trap, the Roth Coast strategy for heirs, state-level considerations, and the critical OBBA phase-outs that can turn a good conversion into a 45.5% hidden tax disaster. Dylan demonstrates how FP Alpha’s Roth Simulator and Tax Projector handle all of this complexity, including the new OBBA phase-out visualisations and Tax Wrap feature for CPA collaboration.

What You’ll Learn

• The three types of Roth conversions — tactical (exploiting loss carry-forwards), opportunistic (market dips), and strategic (wealth transfer to children and grandchildren)
• Eight specific reasons to convert — from filling brackets and avoiding RMD weight to the widow’s tax, state-level arbitrage, IRMAA avoidance, and the Roth Coast strategy for heirs
• The legislative pendulum and why timing matters now — historical pattern of tax increases and decreases, and why current rates at 37% represent a conversion window
• The OBBA phase-out trap that creates a hidden 45.5% tax rate — how a $100K conversion can increase taxable income by $130K when the SALT deduction phases out
• How FP Alpha’s Roth Simulator handles the complexity — pre-populated assumptions, bracket maximisation, optimisation, and dynamic visual output including Medicare premium comparisons
• The Tax Projector’s new OBBA phase-out visualisations — instantly see whether a conversion pushes clients out of eligibility for SALT, tips, overtime, car loan interest, and senior deductions
• How to collaborate with CPAs without getting blocked — why you should present projections upfront and let CPAs advise on the law, not the other way around
• The new Tax Wrap feature — tracking activities throughout the year and preparing clients and CPAs for tax filing with expected forms

Chapters

Click a timestamp to jump to that section of the webinar.

1. 0:30 — Welcome & Introductions — Bob Keebler & Dylan
2. 1:52 — Bob’s Background — Roth Conversions Since Day One
3. 3:30 — Three Types of Roth Conversions — Tactical, Opportunistic & Strategic
4. 5:45 — Poll: How Many Roth Simulations Do You Run Per Year?
5. 7:44 — Legislative History — The Pendulum from 1998 to OBBA
6. 10:14 — Democratic Administration Proposals — IRA Caps & Backdoor Repeal
7. 11:50 — The Three Baskets of Retirement Funds — Brokerage, IRA & Roth
8. 13:26 — The Danger of Letting IRAs Run Wild — The PhD Who Missed 15 Years of Conversions
9. 14:18 — The Secure Act & the Roth Coast Strategy for Heirs
10. 17:00 — Poll: How Are You Running Roth Simulations Today?
11. 20:02 — Eight Reasons to Convert — The Comprehensive Framework
12. 22:10 — FP Alpha Roth Simulator Demo — Assumptions, Bracket Max & Visual Output
13. 25:25 — The Widow’s Tax — Why Married Brackets Create Urgency
14. 27:19 — State-Level Arbitrage — Florida Grandma vs New York Grandma
15. 29:27 — Controlling Retirement Income, Avoiding Phase-Outs & IRMAA
16. 36:14 — Bracket Jumping Rules — What Moves Are Safe and Which Are Dangerous
17. 39:06 — Five-Year Rules, Spousal Basis Differences & Conversion Sequencing
18. 40:30 — The Social Security Torpedo & Medicare Premium Traps
19. 44:52 — The OBBA Phase-Out Trap — How $100K Becomes $130K in Taxable Income
20. 47:51 — Tax Projector Demo — New OBBA Phase-Out Visualisations
21. 53:10 — Working with CPAs — Projections vs Advice & Getting Buy-In
22. 56:59 — Tax Wrap Feature & OBBA Playbook — New Tools

Key Takeaways

The OBBA SALT Phase-Out Can Create a Hidden 45.5% Tax Rate on Conversions

Bob’s most critical warning in this session: under the new OBBA rules, when a married couple’s income crosses $500,000, they begin losing their SALT deduction — $30,000 of deduction disappears between $500K and $600K of income. So if a client is at $499K (getting the full SALT deduction) and you do a $100K Roth conversion pushing them to $599K, their taxable income doesn’t just go up by $100K — it goes up by $130K because they’ve also lost $30K of deductions. That creates an effective marginal rate of 45.5% on the conversion, which eliminates most of the benefit. There are eight different OBBA phase-outs (sixteen when you count married vs single separately), and trying to track these manually is what Bob called a waste of a whole day on a single plan. This is precisely why software is no longer optional.

Map Out a 15–20 Year Conversion Pattern Before Making Any Moves

Bob’s practice is to lay out a 15–20 year income projection for every conversion client, looking at what their income will be each year from age 60 to 80. He shared the cautionary tale of a PhD chemical engineer who bragged about never touching his IRA from retirement at 55 to age 72 — leaving the 15% bracket unfilled for 17 years while his IRA grew to the point where RMDs now put him near the top bracket. The lesson: conversions are far less risky than letting a traditional IRA run wild. By mapping out the full trajectory, you can identify the golden window (often ages 58–64 for IRMAA avoidance, or up to required beginning date if IRMAA isn’t a concern) and convert systematically rather than reactively.

The Widow’s Tax Makes Conversion Urgency Real for Every Married Couple

Bob highlighted what a client coined the “widow’s tax” — when one spouse dies, the surviving spouse loses the married filing jointly brackets and must file single, resulting in a higher tax rate on the same income. Bob shared a current case: a gentleman with terminal cancer and a wife 10 years younger. They’re maximising conversions now while both are alive and can use married brackets. The conversion target: fill up to the bracket the surviving spouse will be in after the first death. This is one of the most powerful and underutilised conversion strategies because it addresses a mathematical certainty (one spouse will die first) rather than speculation about future tax rates.

State-Level Arbitrage Can Make or Break a Conversion Decision

Bob presented two opposite scenarios. Grandma in Boca Raton (no state income tax) with children in California (13% state tax): convert aggressively in Florida to avoid California tax on inherited IRA distributions. Grandma in Manhattan (12%+ state tax) with a son in South Dakota (no state tax): she might not want to convert because she’d pay 12% in state tax that the son would never owe. He also flagged states like Rhode Island and Maryland where there’s both a state estate tax and state income tax but no income tax deduction for estate tax paid — making the analysis particularly painful but also making Roth conversion before death even more important. This is what Bob called three-dimensional chess: federal income tax, state income tax, federal estate tax, and state estate tax all interacting.

The Roth Coast Strategy Lets Heirs Double Inherited Roth Money Tax-Free

Under the Secure Act’s 10-year distribution rule, if a client dies and leaves a Roth IRA to their children, the children don’t have to touch it until December 31st of the 10th year following the year of death. Bob calls this the “Roth Coast” — like coasting downhill on a scooter. If $100K is left in a Roth invested in something like the S&P 500, it could reasonably double over that 10-year period, and all growth is completely tax-free. Compare that to a traditional IRA where the same 10-year rule requires taxable distributions. This is one of the most powerful wealth transfer arguments for Roth conversion, and Bob recommended that advisors model splitting assets between traditional and Roth to optimise the heir’s distribution timeline.

Bob Keebler’s Eight Reasons to Convert

Tips & Best Practices from Bob Keebler

About the Speakers