As a fiduciary financial advisor in Brentwood, Holland Capital helps high-income couples near retirement decide whether to begin Roth conversions before their paychecks stop and before required minimum distributions begin. We meet by appointment at a Regus office on Summit View Drive, and by video and phone between meetings.
Large pre-tax balances. Paychecks that will stop. A choice about when to pay the tax.
About 46% of Brentwood households earn $200,000 or more. The median age is about 45, and about 26% of households already receive retirement income.
Pre-tax 401(k) and IRA money is taxed when it comes out. A Roth conversion moves money into a Roth IRA and pays the tax now instead. Whether that helps depends on your tax rate now compared with later. Ask anyone recommending a conversion whether they are a fiduciary and how they are paid.
Why the Timing Matters
While you both earn salaries, a conversion adds to income that may already be taxed at a high federal rate. After the paychecks stop, there may be lower-income years before Social Security and required minimum distributions begin. Those distributions start in your 70s, and the exact age depends on your birth year.
We compare converting now, converting later and not converting at all. Our guide to Roth conversions covers the basics.
Tennessee’s Part, and Its Limits
Tennessee has no individual income tax, so a conversion adds no state income tax. It can still create federal taxable income.
Higher income in one year can also affect Medicare premiums two years later. We include that cost in the comparison.
RETIREMENT ENGINEERING™
The Order Matters
Five retirement decisions and why timing matters.
Paying the Tax on a Conversion
Paying the conversion tax from savings outside the IRA leaves more money inside the Roth. That only works if you have cash or taxable savings to spare. We set the amount each year based on your tax picture and the cash available to pay the tax.
Investing Each Account for Its Role
Our investment management treats the Roth, the pre-tax accounts and the brokerage account as one portfolio, with each account holding what suits it.
How We Work with Clients in Brentwood
Holland Capital Management is an independent registered investment adviser and a fiduciary. M. Chad Holland, CFA, CFP® works directly with clients and is responsible for the planning and advice.
Bring your last two federal returns, recent statements for every 401(k), IRA and brokerage account, both Social Security statements and your planned retirement dates.
We provide a written plan that shows how much to convert each year, if any, and the estimated federal tax on each conversion.
The first conversation is free. If there is work worth doing after that, we will define the scope and cost before you decide whether to move forward.
Our offices are in Charlotte, North Carolina and Winter Park, Florida. We work with clients in Brentwood primarily by video or phone. When an in-person meeting makes sense, we meet by appointment at the Regus center at 201 Summit View Drive, Suite 300.
For clients whose investments we manage, accounts are held directly at Charles Schwab in the client’s own name. Holland Capital manages the investments but does not take custody of client assets. If a client ever needs in-person assistance from Schwab, the closest branch is in Nashville at 4012-B Hillsboro Pike.
We work with clients throughout Tennessee. You can see the other Tennessee communities we serve here.
Our what we do page explains how a planning engagement works.
RETIREMENT ENGINEERING™
The Order Matters
Five retirement decisions and why timing matters.
Frequently Asked Questions
How Is Holland Capital Paid?
We offer financial planning on a fixed-fee basis, subject to the scope of the engagement. Investment management is offered on a fee basis, generally calculated as a percentage of the assets we manage. When providing financial planning and investment advisory services, we act as a fiduciary. Holland Capital Management may also receive commissions when clients buy insurance through the firm. Those commissions create a conflict of interest, which we disclose in our Form ADV.
Why Choose a Fiduciary Financial Advisor for Roth Conversion Decisions?
Holland Capital acts as a fiduciary when providing financial planning and investment advice. For a Brentwood couple, that means the conversion amount follows your tax picture, including the years when converting does not make sense.
Moving savings into accounts we manage raises our fee, and we disclose that before you act.
Where Can Brentwood Clients Meet with Us?
At the Regus office at 201 Summit View Drive, by appointment.
Phone calls handle most quick questions.
Photo: Skye Marthaler / Wikimedia Commons / CC BY-SA 3.0, cropped.
