So, is the new tax reform good or bad for Roth conversions? The easy answer is “yes”!
Roth conversions are a useful option to move money from a standard IRA to a Roth IRA. Standard IRA contributions are tax deductible but you’re taxed when you withdraw the money. Roth gives no up front tax break, but the money isn’t taxed when you withdraw it.
What did Anthony Scaramucci do before briefly entertaining us/appalling us as press secretary? He was the very successful founder of Skybridge Capital. By successful, I mean that he made a lot of money from mom and pop investors and provided them with below average returns. See Skybridge Capital’s own dismal report card.
In the very engaging Freakonomics broadcast of The Stupidest Thing You Can Do With Your Money, the host, Stephen Dubner, interviews Scaramucci about his hatred of the Fiduciary Rule and of index funds. Scaramucci’s answers are worth thinking about. It’s a shame he didn’t think about them.
Hmmmm… Let’s look at actual history for a guide:
How should we think about Powerball?