I’m 70 and started taking Social Security. My adviser said forget about Roth conversions — take a cruise instead. Is that crazy?

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I’m 70 and started taking Social Security. My adviser said forget about Roth conversions — take a cruise instead. Is that crazy?

I’m 70 and started taking Social Security. My adviser said forget about Roth conversions — take a cruise instead. Is that crazy?

“My financial adviser suggested that a Roth conversion was irrelevant at this stage.” (Photo subject is a model.) – MarketWatch photo illustration/iStockphoto

Dear Help Me Retire,

I am 70, just started drawing Social Security, and the money to pay for the Roth conversion would come from brokerage funds.

Several years from now I will be required to take a required minimum distribution (RMD) and am contemplating doing a Roth conversion. My financial adviser suggested that a Roth conversion was irrelevant at this stage, because the time to do it was years ago while I was working.

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It did not matter if it put me in a higher tax bracket, 24% or more. Medicare premiums will increase as well. The adviser said figure out ways to spend what I have, stick with the RMD, and do something like take the whole family on a cruise (not feasible given everyone’s schedules).

My spouse and I are adapting a chunk of wooded riverfront acreage we own into a cabin getaway, and younger family members are enjoying it too. They use the kayaks more than we do! It is an asset that will hold its own or increase in value.

I was quite surprised to hear this approach. Have others gotten this kind of financial advice?  What do you think of it?

Cruises vs. Roth

Related: ‘It bothers me that it’s frozen’: I’m 64 and can’t get my pension until I retire. Is this common?

Dear Cruises,

I can understand your confusion.

Roth conversions can be expensive, but now would likely be the time to capitalize on them, if ever. If your adjusted gross income is less than during your peak earning years, however, you are technically better off doing it now than you would have been several years ago.

Oftentimes, people try to avoid making Roth conversions when they’re in a high tax bracket. If you’re taking in the same kind of money from distributions and Social Security than during your peak earning years, the time in which you switch to a Roth wouldn’t really make a difference.

There’s one more reason this may be a better time than ever to make that Roth conversion: The current tax brackets came to fruition under the Tax Cuts and Jobs Act, and they expire at the end of next year, when they’ll revert to their previous, higher state.

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No one can say for sure what those tax rates will be after 2025, but most people would guess they won’t be lower. That means any conversion you make in 2026 and beyond could potentially cost you more.

And yes, a conversion could affect your Medicare premiums. The income-related monthly adjustment amount is affected by your income from two years prior, so you may not immediately see a difference. Here’s the breakdown from the Centers for Medicare & Medicaid Services on IRMAA for this year (the 2025 numbers aren’t out yet).

Some experts say there is never a wrong time to go the Roth way, whether it is an initial contribution or a conversion. You can read more from one certified public accountant who is often touting the benefits of the Roth. Also, your plan to use money from brokerage funds to pay the tax liabilities on the Roth conversions would allow you to keep your balance intact.

Spending your money now isn’t a bad idea — but within reason! You don’t want to blow most of your retirement assets just so your RMD is lower than it otherwise would have been, as that would put your future in danger.

Before you pull out the credit card and hit the nearest mall, make sure you have a spending plan in place. Look over your current income, your current bills and make some reasonable predictions as to what those figures will look like in the future. That will give you an idea if you’re spending reasonably, if you’re being too frugal, or if you’re even over budget.

There is no one right way to spend. A cruise could be a lovely idea if it worked with everyone’s schedule, but that wooded riverfront getaway sounds like a dream all its own. You may end up investing more money into that place so it becomes a home away from home, or a place you retire to when you’re both older and looking to slow down.

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