From $600K Income to Smart Roth Conversions: Real Strategies to Build Wealth and Retire Tax-Efficiently
Not all financial planning scenarios are created equal—but they all have one thing in common: the need for clarity, discipline, and smart tax strategy. In this session, we heard from real people tackling big financial decisions, from building a $10 million net worth to managing six-figure student debt. Here’s what we learned.
Mike from Tampa: A High Earner with Big Goals
Mike and his wife are bringing in $600,000 annually and saving aggressively. They’re maxing out their 401(k)s and setting aside an additional $5,000 to $10,000 each month in cash and investments. With $870,000 already invested, $104,000 in cash, and a fully paid $700,000 home, they’re building toward a $5–$10 million net worth by age 60–65.
Mike’s also dealing with $300,000 in student loan debt, managed under a pay-as-you-earn plan. With his income now higher, payments will increase to $1,200–$1,300 per month, but he’s planning to balance this by funding 529 college savings accounts for his two kids, aiming to hit $250,000 in total.
Kate from California: Nearing Retirement with Strong Assets
At 55, Kate is a single mother with a $6 million net worth. Her plan? Retire at 58 with a well-diversified portfolio: $1.3 million in a 401(k), $1.4 million in an IRA, $1.2 million in a brokerage account, $1.3 million in deferred income, and a paid-off primary residence.
Joe and Big Al advised her to switch her deferred income payout from five years to ten years. Why? It opens up more space for Roth conversions while minimizing tax brackets, avoiding massive RMDs later on. By age 65, her accounts could double in value—without planning, she could face $400,000 in taxable income annually just from distributions.
The Case for Roth IRA Conversions
Tactical Truth raised a great question: when should you do your Roth conversions? Joe and Big Al suggest January. It gives you the full year to pay quarterly taxes and allows those dollars to grow tax-free for an extra 12 months—especially helpful if the market grows 10% over the year.
Protecting Real Estate Gifts from In-Laws
MJ asked how to protect housing gifts from ex-partners. In states with community property laws, things can get tricky. Big Al recommended using separate property agreements or setting up a trust to shield the gift. It’s more legal than financial—but crucial for preserving family wealth.
Step-Up in Basis: Building on Inherited Property
What happens if you demolish an inherited house and rebuild? Figueras posed the question. Joe and Big Al confirmed that the stepped-up basis still applies to the value of the property at the time of inheritance. Improvements like a new build are simply added to the cost basis, meaning potential tax savings when the property is sold.
Gold: Still Just a Shiny Rock?
An old clip resurfaced in which Joe and Big Al recommended no more than 2% of a portfolio in gold. Eight years later, they stand by it. Gold doesn’t produce cash flow or dividends—it’s a hedge, not a growth engine. It can shine during inflation, but it’s no substitute for a diversified investment strategy.
Final Thoughts: Financial Success Is About Discipline
Whether you’re earning $600K like Mike or entering retirement like Kate, the principles stay the same: plan ahead, invest wisely, minimize taxes, and keep your eyes on long-term goals. From Roth conversions and 529s to deferred comp and real estate inheritance, smart moves today can protect your wealth tomorrow.
Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.
IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.
• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
