We have something called separating the coffee from the cream, and that is when you have after-tax dollars inside your IRA or your 401(k). It might have got there because you made a non-deductible IRA contribution. You might have been working and you were limited as to how much you could deduct putting into your 401(k), or maybe because there was a match, or even if you didn’t get a tax deduction, you got tax-deferred growth. It’s not unusual for us to have clients with $50,000 or even $100,000 of after-tax dollars inside your IRA and 401(k). Most advisors lose it, and they lose that advantage.

If you do this right (I’m not going to have time to go through the mechanics), you can actually do a Roth IRA conversion of the traditional IRA or 401(k), and sometimes when you run the numbers out far enough (which by the way, doesn’t cost you a dime), it could mean a difference of hundreds of thousands of dollars.

Hardly anybody does it. We’ve been doing it for years. I do a lot of work with Westinghouse engineers and a lot of those guys and a few women, but mainly guys, had this type of configuration where they might have had $1 million or $2 million dollars in their IRA, maybe $50,000 or $100,000 of after-tax dollars inside their IRA, and we were able to separate the coffee from the cream, do the Roth IRA conversion on that $100,000 or $50,000 for free, and then leave the rest alone. Not going to have time for the details. It is in the book.