OP-ED
You cannot deny the Ed Slott Marketing Company as a force, I am just not sure you should hire a marketing company to manage or protect your assets.
This “must-convert” theory breaks all of the scientific or mathematical rules for making a “theory”. There are more than three UNPREDICTABLE suppositions that make the Ed Slott theory undeniably flawed, but three flaws are three too many when managing your money. Nonetheless, here are three.
1. Taxes are going up.
True, we can agree that short term taxes may very well be higher. The real truth is they are “30 year cyclical” and sooner or later the higher entitlement political bozos will be voted out and our taxes will cycle back down in better times. If you retire when taxes come back down, Ed Slott is wrong.
2. The use of “dead assets” to pay the taxes today on the conversion.
A better use of dead assets, other than giving them to the government, is to manage them out of “dead asset” status into a vibrant asset. In my opinion there is no such thing as dead asset.
3. Ignoring the rule of compounding interest over time.
If someone pays a 38% tax on an asset, it can be likened to losing that much in poor market performance. If $100,000 in investable assets is now $62,000 in one day you would want a new financial advisor. (Remember the client’s money is being used to pay taxes even if it is from their checking account and not in this particular asset.) Also, as we all know, it would take a 62% growth of that new Roth asset to be made whole again. The Traditional Tax Deferred advisor is now 62% (market performance) ahead of the Ed Slott “Preferred Advisors”. Give me that lead when managing assets and I am confident with a little compounding over time I could keep that lead. My clients’ taxes in retirement would have to be more than 62% on their RMD’s for Ed’s theory to win. I am not sure that would be likely.
I have been managing money since the early 90’s and even then we were told to manage money based on an inevitable tax increases in the future.
Since then taxes have actually gone down and I have never had a client jump into a higher tax bracket in their retirement years. For the Ed Slott die-hard believers, I sure hope they get a client whose taxable income and bracket are higher in retirement.
Tatyana Ladd-Thomas
Here are some great articles that you can read before paying for Ed Slott’s Programs or the worse, the TAXMAN!
“Even Ed Slott is wrong about Roth IRA Conversions”
“Roth IRA Conversions: Do They Make Sense?”
 | By Roccy DeFrancesco JD, President, The Wealth Preservation Institute |
Independent Advisors work hard and there is no bad marketing solution to get them in front of potential clients. This post is not intended to offend any Ed Slott Advisors and should be read as an opinion and not as a judgement. Be careful of advisors that pay $5000 to be listed and brainwashed by a non-licensed expert like Ed Slott, Dave Ramsay, or Clark Howard. We like a lot of what they say, but would never take their advise over proper experts. We may ask them about their marketing expertise because they all make quite a bit of dough selling their books, tapes, CD’s, speaking engagements, and yes… endorsements.
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