Cash on the sidelines is for large dips in the stock market, not for Roth conversions.You don't need to have cash on the sidelines in order to do Roth conversions. As an example, my last Roth conversion was at the end of 2022 when I moved some total stock market funds from my tIRA to my Roth.I'm expecting more volatility for the next 2-3 months and I've put some cash on the sidelines and prepped my Roth conversion so I can take advantage of it. Today was nothing though.
Key point is that I paid less in tax to make that conversion compared to its value today.
You don't gain anything from converting it to cash, then making the conversion, all you do is miss out on gain's if your prediction of volatility is wrong!
Cash on the sidelines is typically an emergency fund to cover expenses, or for those that think they can time the market.
Statistics: Posted by baconavocado — Wed Sep 04, 2024 12:47 am — Replies 49 — Views 4064