Ford Escape Collision Avoidance Intelligence
Our most recent SUV purchase was the 2020 Ford Escape. Most of our friends probably cannot tell the difference between the 2014 red Escape we traded in for the red 2020 model. The colors are the same and the body styles are very similar. But there are some additional features in the 2020 model that are remarkable. There are several features that, when turned on, are very helpful aids with remarkable capabilities and excellent response times. The car can “see”, and it can react to dangers.
Some of the features include blind-spot monitors, lane-departure warning, and forward collision mitigation. If I turn on the features, the Escape will stay in the lane. It will brake (when on cruise control) if a car pulls in front of me that isn’t increasing in speed. It will tell me to put my hands back on the wheel if I take them off while on the driving assistance controls.
Four Reasons to Avoid ROTH Conversions
The first should be obvious. If you bought a poor investment, and it has dropped dramatically in value, then moving the bad investment from your IRA to your ROTH is, in my opinion, a dumb thing to do. Bad investments should be sold. Don’t hold onto a bad investment thinking, “It might get better.” It rarely does. If most investors are selling an investment, the prudent investor sees it as a poor risk.
The second reason has to do with dividends. You might want to convert dividend paying investments that have dividend growth from your IRA to your ROTH. If there is no income, it might still be a good conversion candidate. But avoid conversions of positions that don’t follow your core strategy. If your core strategy is dividend growth, then avoid converting assets that don’t align with your core. So, for example, I have non-dividend speculative investments in my traditional IRA. I am not converting them to my ROTH.
The third reason is income taxes. In retirement you want to pay attention to your adjusted gross income so that you don’t inadvertently bump yourself into an income category that increases your Medicare premiums. In our case, I don’t really want our adjusted gross income as a married couple to exceed $185,000 in 2022. Each ROTH conversion increases that income. Therefore, I add all of our income for the year (and projected income) to determine how many dollars remain for conversions.
Finally, you should be thoughtful about your working years income and tax bracket and how that will change in retirement. If you are a high-income household, and in retirement you anticipate your income being considerably less, then doing a ROTH conversion is not the most sensible approach for you to take.
STOR Shares Were Converted Yesterday
So I’ve done my homework. We are still below $185,000 in AGI. It is highly likely that our combined Social Security income, dividend income, capital gain income, earned income, and RMD’s will keep us in a higher tax bracket. Therefore, I converted all of my shares of STOR (STORE Capital Corporation) from my IRA to my ROTH.
My concern is that my previous posts about ROTH conversions might cause my readers to think that “all ROTH conversions are good.” Like just about everything else in life, there are exceptions. Only convert if the income and tax implications make sense.
Cindie and I own 600 shares of STOR as a long-term investment.