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Tax Software 2026

William Perry | Nov 3, 2026

"Haha, perhaps the bard would welcome the imitation. We have a fair amount of foreign tax credit so this seems like something we should care about."

- Michael1

Taxes

AMONG THE MOST COMMON debates in personal finance is whether Roth conversions are a wise strategy. Especially as the end of the year approaches, it’s worth looking at both sides of this question. If you aren’t familiar with it, the idea behind a Roth conversion is that individuals can choose, at any time, and at any income level, to move money out of a pre-tax traditional IRA into a Roth IRA. There’s a catch, though: In the year that you complete a conversion, you must pay income tax on the amount that you convert. So, the bet you are making with a conversion is that your tax rate today will be lower than it will be in the future, when you otherwise would have taken those dollars out of your IRA. For example, if you could pay a tax of just 22% today to convert dollars from your pre-tax IRA to your Roth IRA, you would happily do that if you expected your tax rate down the road to be much higher—say, 32%. This seems straightforward, but not everyone agrees. For starters, Roth conversions’ detractors point to the uncertainty inherent in the exercise. Predicting future tax rates is an imperfect science, and if rates end up going lower in the future, that could turn the benefit of a conversion upside down. You could end up paying a higher rate today than you would’ve in the future. Given the state of federal finances, it might seem unlikely to expect tax rates to go down, but no one can say that with certainty. Congress often changes the rules, and as recently as the late-1980s, the highest ordinary income tax rate was nine percentage points lower than it is today (28% vs. 37%). In addition, it can be difficult to predict our own future income with precision. Consider required minimum distributions (RMDs) from retirement accounts. They’re a key component of most retirees’ income, but because they’re dependent on future investment returns, the best any of us can do is to estimate this figure. Roth conversions, in other words, involve uncertainty along multiple dimensions. This is a point even supporters acknowledge. That’s why, to help manage this uncertainty, I look at Roth conversion candidates as falling into one of three categories. The first category: When a taxpayer’s marginal tax rate is currently in one of the two lowest brackets, either 10% or 12%, I see it as an easy decision to complete a conversion. That’s because it’s hard to imagine that their future tax rate would be any lower. At worst, in that case, a Roth conversion in one of these two lowest brackets might just be a wash. The second category: When a taxpayer’s marginal rate is over 30%, I see that as an easy decision as well, but for the opposite reason. Roth conversions rarely make sense at that level because it’s hard to make the argument that a taxpayer in a very high bracket might end up in a bracket that’s even higher. To be sure, it can happen—and I’ll describe one clear case below—but it’s hard to have confidence in that expectation. For that reason, a conversion at a rate over 30% typically doesn’t make sense. The third category: If your marginal rate is in one of the middle brackets—either 22% or 24%—that’s when the conversion decision doesn’t have an easy “yes” or “no” answer, and it’s worth examining other factors. When would a conversion in this middle range make sense? If the composition of your assets is such that you have significant balances in pre-tax accounts and you haven’t yet hit RMD age (either age 73 or 75), that’s when you’d want to sharpen your pencil. If your RMD based on your current pre-tax balances would push your income into a much higher tax bracket, then it would be safe to assume that, with some additional investment growth, your tax bracket will almost certainly be higher down the road. That’s a clear case for a Roth conversion. Similarly, if you have other income sources, such as a pension, that are guaranteed, that too would make the conversion decision easier. What if the comparison between your current and projected future tax rates isn’t conclusive? Suppose, for example, your taxable ordinary income today is $210,000. For someone married and filing jointly, that would translate to the 22% marginal tax bracket. Even if your income rose sharply in future years with required minimum distributions, up to $300,000, for example, the tax impact would be modest. Income of $300,000 would translate to a marginal bracket of just 24%. So a Roth conversion might not seem like an urgent priority. In that case, there’s another factor that might be a tie-breaker. If one spouse passed away, the surviving spouse would be subject to the tax brackets for single taxpayers. Continuing with this same example, $300,000 of income would result in a substantially higher marginal bracket of 35%. If that were the case, then a conversion today at 22% might make good sense. The upshot: If you’re doing Roth conversion math, and the results look inconclusive, consider what might tip the scales. Another potential tie-breaking factor to consider, if the math isn’t conclusive, would be the estate tax. At the federal level, a tax of 40% applies to assets over $15 million, or $30 million for a married couple. For someone with a balance sheet at that level, Roth conversions can make a lot of sense because they have the result of reducing the size of an estate without reducing the after-tax value of the assets. Consider a simple example: If you complete a conversion of $200,000 that results in $40,000 in taxes, that $40,000 is no longer in your estate, and thus no longer subject to estate tax. This is the only case in which I see an argument for conversions at rates over 30%, because any tax below 40% would still be less costly than the future estate tax levy. Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.

Estate Plan

Protecting What We Built

ArticleDennis Friedman | Nov 7, 2026

SINCE RETIRING, WE’VE done a lot of traveling. One thing that continually stands out is just how crowded airports have become—even top-tier airline lounges are sometimes packed to capacity. Watching the endless stream of travelers, my wife often turns to me and asks, “Where do all these people get their money?” I suspect some of them, especially the older travelers, are “middle-class millionaires.” They didn’t build their wealth through massive salaries. Instead, they accumulated it gradually through home appreciation, retirement savings, disciplined investing, and decades of compound growth. That’s how my wife and I built our net worth. We grew our savings slowly over the course of our careers through patience and discipline. Now that we’ve reached a point where we feel we have enough, our focus has shifted from growing our wealth to protecting it. Here are three ways we are protecting our hard-earned savings while continuing to enjoy our retirement. Fortifying Our Liability Coverage Ever since a friend told me that his own son-in-law sued him after falling down his stairs, I’ve been concerned about our own liability exposure. I don’t consider us to live a lifestyle that would expose us to a particularly high risk of being sued. We don’t have a dog, swimming pool, rental property, or boat. Even though I consider our risk relatively low, I’ve become more conscious of how much we have to lose from an unexpected liability claim, such as a severe auto accident. I’m not an attorney or insurance professional, so I’m not suggesting that our approach is appropriate for everyone. But it did lead me to take a closer look at how our assets might be protected if we were ever sued and a judgment entered against us. In recent years, our modest California home has appreciated significantly alongside real estate values across the state. When I considered our home equity together with our taxable savings and other assets, we eventually concluded that our existing umbrella coverage was no longer sufficient for the amount of wealth we had accumulated. I also learned that California’s homestead exemption provides a certain amount of protection for equity in a primary residence, although the rules are more complicated than I had previously realized. The amount of protection depends on the circumstances and is subject to statutory limits and adjustments. For our home, I didn’t want to assume that all of our home equity would be protected from a judgment. Our IRAs also have statutory protection under California Code of Civil Procedure §704.115 based on what is deemed reasonably necessary for retirement support. Learning this gave me some comfort, but it also reinforced the fact that different types of assets can have different levels of protection. Our taxable brokerage account, however, does not have the same type of statutory protection. It remains exposed to potential legal claims. We ultimately purchased additional umbrella coverage through a specialty insurer. Securing that extra layer of protection provides us an invaluable peace of mind. Adopting a Moderately Conservative Asset Allocation Now that we’re in our 70s, we feel we can afford to be less aggressive in the stock market. Our portfolio is currently allocated 45% to stocks, 45% to bonds, and 10% to cash. This asset allocation gives us enough exposure to growth to help combat inflation while providing some protection against a severe bear market. Consider a difficult scenario in which the stock market falls 40% and the bond market declines 10%. Under those conditions, our portfolio would lose roughly 22.5%. Alternatively, if our 55% allocation to bonds and cash holds its value while stocks absorb the full 40% decline, we would still have 82% of our portfolio’s value intact. This allocation gives us a larger cushion against a severe stock-market downturn. It would allow us to rebalance into stocks after a major decline, rather than being forced to sell stocks when prices are depressed. More importantly, this asset allocation has so far allowed us to maintain a comfortable lifestyle without worrying about market swings. Hiring a Financial Advisor I don’t recommend a financial advisor for everyone. In fact, if we were younger, we probably wouldn’t have one. But at age 75, I have to concede that I’m not as sharp as I used to be, and I can get emotional at times. Those aren’t ideal qualities to have in a world where scammers are becoming increasingly sophisticated. What I like about having a financial advisor manage our money is that I have to go through my advisor to access our funds. That extra layer of protection helps protect our portfolio from scams—and from ourselves. It gives us a chance to pause and think things through rather than make an emotional decision in the moment. At this stage of our lives, we’re paying for more than investment management. We’re paying for another layer of discipline and protection—and for the peace of mind that comes with knowing someone else is looking out for us. Focusing on Making It Last Now that we're retired and have accumulated enough to support the life we want, our priorities have changed. We don't need to squeeze every last dollar of growth from our portfolio. Instead, we're trying to make what we've built lasting—protecting it from lawsuits, market declines, scams, and, perhaps most importantly, our own mistakes. Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. Follow Dennis on X @DMFrie and check out his earlier articles

Happiness

Enough already?

greg_j_tomamichel | Nov 7, 2026

"Wonderful news Mark. I’m sure you will take great care of your daughter."

- RCC

From HumbleDollar Founder Jonathan Clements

Behavior

Knowing Me

DOES OUR PERSONALITY help determine our financial success? It seems it does, or so says academic research. Psychologists have zeroed in on five key…

Retirement

The Leap of Faith

Mark Crothers | Nov 3, 2026

"UofODuck, the parachute image made me smile, though I’d guess most of us spent those first couple of years checking the straps far more often than was strictly necessary. Your two to four years makes my eighteen months look positively reckless. And I thought you were very fair to point out that it depends on what you started with. I said something similar to Olin: more resources simply give you more room to make mistakes and survive them. Still, I suspect the anxiety is much the same whether you’re sitting on a lot or a little. It’s only the size of the number we’re worrying about that changes. Did you have a particular moment when you realised you were spending less than you earned, or did it just creep up on you?"

- Mark Crothers

In Retirement

Planning Without Predicting

Mark Gardner | Nov 6, 2026

"I have no insider information, but I suspect William Dorner's observation is correct, even though there may be short-term pain at some point for some folks. On the investing aspect of it, I agree with you--stay invested and stay diversified."

- Edmund Marsh

In Retirement

Should One Liquidate in Retirement?

Feisal Brahim | Nov 7, 2026

"Feisal, thank you for sharing this. Part of my family is Punjabi, where it’s an accepted expectation that an older relative will move in with the family as they age. My cousin sister finds great comfort in knowing that’s her plan, and I suspect you’ll find the same. Her approach differs from yours in a couple of ways. She hasn’t sold her home, which is in a trust for her grandchildren, and she keeps a large part of her portfolio in cash, which she enjoys spending generously on the family. What strikes me is that both of your plans seem to rest on the same thing: knowing where you’ll be looked after. I’d echo William’s point about making sure your will and beneficiary designations are in order, and perhaps keeping a cash cushion so you never have to sell stocks in a downturn."

- Mark Crothers

Saving

The Repair I Didn’t Need

Andrew Clements | Nov 4, 2026

"We didn’t hear any clunking over bumps or notice any steering issues. That’s part of what made me question the recommendation. I’m glad we got a second opinion: Boca Auto Fix inspected the links, saw no signs of wear, and told us they didn’t need replacing. Your sister-in-law was fortunate to have you go through the list with her. What I appreciated about Karina was that she did much the same for me: She explained what needed attention and what could wait. That’s the kind of advice that earns my trust, whether it comes from a dealer or an independent shop."

- Andrew Clements

Lists

Jonathan’s Parting Thoughts: No. 5

Jonathan Clements | Nov 6, 2026

"It's great to hear from Jonathan again. This post highlights one of Jonathan's really impressive professional assets - his ability to frame a complex topic in terms we laymen could understand."

- Rick Connor

Spending

Dickies simplistic view of personal finances

R Quinn | Nov 3, 2026

"You’re right, no doubt others find great value and security from tracking and budgeting. I’m trying to understand, not promote my views, what am I missing that others find of great value? An effective tax rate below 3% is less than the average for 50% of American taxpayers of 3.7% so you have accomplished quite a bit. You should share some of your strategies because they are very effective."

- R Quinn

Spending

Is an 18% Service Charge a TIP?

James McGlynn CFA RICP® | Oct 13, 2026

"It’s a pity that restaurant owners have turned their staff into professional beggars in order to pay their rent. Why not pay your employees fairly? A tip should really be a gratuity to buy a cup of coffee, not a means of survival."

- Mary Gizzie

Taxes

Tax Software 2026

William Perry | Nov 3, 2026

"Haha, perhaps the bard would welcome the imitation. We have a fair amount of foreign tax credit so this seems like something we should care about."

- Michael1

Taxes

Roth Conversions

ArticleAdam M. Grossman | Nov 7, 2026

Estate Plan

Protecting What We Built

ArticleDennis Friedman | Nov 7, 2026