On a recent Mesirow Monday radio appearance on WGN's Your Money Matters with Jon Hansen, Mesirow Advanced Planning Specialist and Wealth Advisor Gary Pattengale, CFP outlined the strategic opportunities and common pitfalls of Roth accounts and conversions, especially for high net worth individuals focused on long-term wealth optimization.

"Taxes shouldn't be an afterthought in retirement planning," noted Gary. "Done right, tax strategy becomes a powerful tool for control, flexibility, and legacy."

Roth IRAs and Roth 401(k)s, unlike their traditional counterparts, are funded with after-tax dollars but grow and can be withdrawn tax-free. They also aren't subject to required minimum distributions (RMDs), making them a key asset in managing future income and taxes.

Gary emphasized the value of tax diversification, holding both Roth and traditional accounts to hedge against future tax rate changes and legislative uncertainty.

While Roth conversions are often promoted as a universal solution, Gary cautioned that they can trigger unintended consequences, including higher Medicare premiums, capital gains, or Social Security taxation. He noted that phased conversions executed during lower-income years, typically post-retirement but pre-RMD can offer significant benefits when well-timed.

"Conversions are not all-or-nothing. Precision matters. Modeling matters," he added.

Gary also warned against paying conversion taxes out of the IRA itself: "The moment you reduce the converted amount to pay taxes, you lose much of the long-term upside."

Mesirow Wealth Management, the firm?s founding capability, provides comprehensive financial planning to help clients evaluate complex decisions and align tax strategy with investment, estate, and philanthropic goals.

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