Vanguard’s “BETR” Approach to Roth Conversions


A recent paper from Vanguard sheds light on when it makes sense to transfer funds from a traditional IRA to a Roth IRA (a Roth conversion). Recall that the proceeds of a Roth conversion are subject to taxation at the investor’s marginal rate, but the converted funds are tax-free forever (i.e., until the account is depleted either by the investor or his heirs).

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Vanguard’s Market Outlook for the Coming Decade

In the recently published “Vanguard Economic and Market Outlook for 2018: Rising Risks to the Status Quo”, Vanguard takes an increasingly guarded stance. The authors state that the most pronounced risk of 2018 is that already tight labor markets will grow tighter, finally leading to a cyclical uptick in inflation. An unexpected increase in inflation may cause markets to drop in anticipation of tighter monetary policies from the world’s central banks.

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An Ill-Advised Proposal

“A Proposal to Limit the Anti-Competitive Power of Institutional Investors” is the title of a working paper by a group of professors/researchers from the University of Chicago Law School and the Yale University. It was brought to my attention through a Wall Street Journal opinion piece (1/9/2017) by Barbara Novick, a co-founder and vice chairman of BlackRock, the world’s largest asset manager.

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