10.20.26 Ask An Advisor With Wes Moss

In a rapid-fire segment of listener questions, financial advisor Wes Moss tackled Roth conversion mechanics, the state of the financial advising industry, the role of net worth in planning, and the emotional logistics of retirement location decisions. The conversation balanced technical tax rules with the behavioral and demographic realities that shape financial choices, offering concrete guidance on when to pay taxes from a separate account, why the financial advisor shortage is an opportunity for career changers, and how to think about liquidity versus income in retirement assets.

The Mechanics and Trade-Offs of Roth Conversions

A listener named Ron in Florida asked about a $100,000 Roth conversion from his IRA, wondering if he could simply have $25,000 withheld for taxes and roll the remaining $75,000 into the Roth. Moss confirmed that this is technically allowed and does satisfy the IRS, but he warned that it is not the ideal approach. "The conventional wisdom says, and it's not wrong, that if you're going to convert $100,000 and let's say you owe $25,000 in taxes to do so, pay for that $25 out of another account," Moss explained. The reason is that the entire $100,000 is taxable regardless of how much actually lands in the Roth. If you pay the tax from a separate after-tax account, the full $100,000 goes into the Roth and begins growing tax-free. If you withhold from