Ed Slott: Roth IRA opportunity cost or opportunity lost?
It's all about the tax rates when it comes to Roths, said tax guru and founder of Ed Slott & Co.
One of the arguments against a Roth conversion is the lost opportunity – or the opportunity cost. But Ed says that argument doesn’t hold up. Instead, it’s all about the tax rates.
If the tax rate is the same at withdrawal and the same in retirement, it doesn’t even matter what the return is, as long you are consistent, you will end up with same amount.
Ed shows some example calculations to prove his point and says this is an important concept that advisers should get across to clients that are considering a Roth conversion.
