u/GenXDrummer

I have never done a Roth IRA conversion, but my wife and I are thinking about doing this for 2026. There's an old account that was converted from a 401k to a Rollover IRA that has about $72k in it. The standard deduction for federal income tax (Married Filing Jointly) is $32,200 and if we did the Roth conversion we would still be in the 24% tax bracket. Here is the question:

Before we owe taxes on the conversion, we have to "fill up" the standard deduction first, correct?

Here is my scenario: my wife has an old 401k that we converted to a Rollover IRA 2 years ago, since she is no longer with that original company. It currently has around $66k in it. She had it before we got married and she sort of forgot about it, LOL!

Our taxes are filed as Married & Jointly. We land in the 24% tax bracket with room to spare on the upper end. Paying taxes on a $66k conversion would not push us to the next tax bracket.

I am about to retire from my current job and will receive a nice pension. I'll be moving to another job which will increase our annual income by another $30k a year, but we still won't move to the next tax bracket (but if we do the conversion, it will come close for this year...still under, but close).

Knowing all of this, does it make sense to do a full, one-time conversion now while her old account is still relatively "small" and just pay the taxes, knowing that she has at least 16-21 years of growth left in it, and that growth will most likely take her $66k account well into the 6 or even 7 figure range?

TYIA!

As crazy as it sounds, I've never worried about drawdowns. The ETF's I am in (heavy tech) always bounce back quickly and I do not use any type of specific dividend ETF like SCHD, FDVV, QQQI, or GPIQ to "soften" the blow. With that being said, as my wife and I hit our 50's, I am starting to look at some things. Please tell me if my understanding of drawdowns is correct...

A max drawdown is the measure of a stock's highest peak to its lowest trough. For example, if a stock had a high of $100 and a low of $50 after hitting that previous high, the max drawdown is 50%. That much is pretty straightforward.

This next part is what I am unsure of, or at least my coffee hasn't kicked in and I am not looking at it correctly. Let me do this year by year.

Tech Stock: "XYZ"

Year 1: 100% gain

Year 2: 50% gain

Year 3: 50% gain

Year 4: 25% drawdown

Using the above numbers, if XYZ started at $10 per share and then doubled in year 1 ($20), added 50% more in year 2 ($30), added another 50% in year 3 ($45), and then hit a 25% drawdown in year 4, would that not make the price per share $33.75? Even in this drawdown scenario your gains are still +337.5%, correct?

It is my belief that semiconductors and technology are the biggest investing winners of the future. I am well aware that there will be drawdowns, crazy market turns, etc. I know that what I am doing is high risk and many people would not be comfortable doing this.

FTEC - $100k

SOXQ - $100k

FTXL - $100k

CHPS - $100k

AIS - $100k

Is there a ton of overlap? Absolutely! Three different semiconductor ETFs is insane! But it also picks up the little 5% and 10% here and there that isn't overlapped.

Am I crazy? Perhaps. I'll let it sit for 1 year and then compare the gains / losses to the Bogleheads 3-fund, the Buffet all-in S&P 500, the Total Market folks, etc. If the gains are massive, I'll go another year, and then another, and then another.

Time will tell.

Some people will say that free money is a good thing, and I would agree. However, a 3% match (RH Gold) only yields $225 a year in a Roth IRA if you are under age 50, and $258 per year if over age 50. With a SoFi match, you're only getting $75 to $86, respectively. Those numbers don't exactly light the afterburner for investing. Yes it is free money, but it doesn't amount to much of anything in the big picture.

What am I missing with these accounts? Is it all a gimmick?

I hold both ETF's in my portfolio (DCA issues over time) and I have noticed that SOXQ has beaten SMH across most metrics so far over the past year. Using Stock Analysis...

1 Year: SOXQ = 138.75%, SMH = 133.06%

6 Months: SOXQ = 40.99%, SMH = 37.25%

3 Months: SOXQ = 23.66%, SMH = 20.52%

1 Month: SOXQ = 35.10%, SMH = 31.59%

I'm guessing this phenomenon is because SMH is more heavily weighted toward NVDA, while SOXQ is more heavily weighted toward MU, which has been on an absolute tear this past year.