The Roth Conversion Scam

BobKamman · ‎03-20-2026

So far this year I have berated one client (a PhD) for doing this on the advice of her high-school-diploma "financial adviser," and fired another one because her "financial adviser" wanted to jack up her income so she could take advantage of a DAF donation. (The extra income eliminated the senior deduction, and raised her 2027 Medicare premiums by at least 50%. The IRA, of course, could have been used for QCD's with no tax consequence.)

This is how I try to explain the lack of any benefit from paying tax now instead of ten years from now. I'm sure there are situations where a Roth conversion is a good idea. For example, someone moving from Florida to New York. But am I missing something here? Have you ever recommended a Roth conversion? Why?

This is 8th grade math.

1) Take 20,000, tax it at 25% (as you are doing this year), result $16,000, invest what's left in a Roth at 8% (reasonable yield on S&P Index) for 9 years, and (see Rule of 72) it has doubled to $32,000.

2) Keep the whole 20,000, let it double in 9 years to 40,000, then tax it at 25% and what do you have? Surprise! $32,000.

Except in 10 years, you might not be in a 25% tax bracket. It might be down to 10% or 15%, now that you're retired. Or you might be in assisted living, paying $10,000 a month that is deductible as a medical expense, so your tax bracket is zero.

What I don't understand is how these people who "manage" your assets for a percentage of your net worth, encourage people to reduce their estate by 25% before they even get started.