If the Market is Down, is it the Right Time for a Roth Conversion?

A Roth conversion is a tool for transferring money from one investment tool into a Roth IRA. When the stock market is down, investors can consider whether the conversion makes sense for their tax planning, investment goals, and estate planning needs. This article is not intended to provide legal or financial advice, but will summarize information published online which may assist you in working with your legal or financial advising professional to create a plan that is right for you. 


  • What is a Roth conversion?


Why might a Roth conversion be appealing when my stock portfolio is down?

  • With a Roth conversion, the account owner has to pay income tax on the money they convert. 
  • If your stock is down, the amount calculated for income tax will be lower. 
  • For example, if you purchased stocks for $100,000, but now they are only worth $75,000, then a Roth conversion at that time would only involve income tax on the $75,000 amount. 


 Why might a Roth conversion be appealing for estate planning in California purposes?

  • The Roth IRA conversion is a strategy to pass IRA assets to non-spousal beneficiaries either directly or as continent beneficiaries upon the death of a surviving spouse. 
  • It is a way to prepay taxes for the beneficiaries. 
  • For more discussion about this strategy, consult these resources:


Where can I find information on the other pros and cons of a Roth conversion?





Consult the Law Office of David Knecht

At the  Law Office of David Knecht,, we have extensive experience with estate planning and can help you understand and evaluate the various tools for effectuating your wishes and efficiently preparing for the transfer of your estate. We will perform a one-on-one evaluation to help you create an estate plan that is customized for your needs. Call us at 707-451-4502.