The surprising (and smart) questions you should be asking about your retirement strategy

When most people think about retirement investing, they ask questions like “How much do I need to save?” or “Should I use a Roth IRA or Traditional IRA?”

Those are important, but the smartest investors ask deeper, more nuanced questions that actually move the needle. In this post, we’ll tackle five underrated but powerful questions that could dramatically improve your retirement outcome.

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1. Can I inherit my spouse’s Roth IRA and keep the tax-free status forever?

Yes—and no. Inheriting a Roth IRA from a spouse offers unique planning opportunities, but most people don’t realize how flexible (or complicated) it can be.

Here’s what makes it special:

• A surviving spouse can roll the Roth IRA into their own Roth IRA—and treat it like it was theirs all along. That means no required minimum distributions (RMDs), and tax-free growth continues.
• But what if you’re under age 59½ and need the money? Here’s a little-known trick: instead of rolling it over, you can keep it as an inherited Roth IRA and take tax-free withdrawals anytime without penalties.

Smart strategy: A younger surviving spouse could delay rolling over the Roth IRA until they turn 59½, keeping penalty-free access in the meantime.

This flexibility can be a game-changer for younger widows/widowers who need retirement income but want to avoid taxes or penalties.

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Absolutely! Here’s a rewritten version of Question 2 from the blog that now includes both:

• Roth IRA contributions (with earned income), and
• Roth conversions (from a pre-tax account),
  specifically tailored to someone over age 59½.

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Question 2: I’m Over 59½ With a Pre-Tax Retirement Account — Can I Still Use a Roth IRA?

Yes—and in fact, this is one of the best times to take advantage of both Roth IRA contributions and Roth conversions. Once you’re past age 59½, you unlock a powerful level of flexibility that can be a game-changer for long-term tax planning.

Let’s break it down:

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✅ You Can Still Contribute to a Roth IRA—If You Have Earned Income

Even in retirement or semi-retirement, you can contribute to a Roth IRA as long as you have earned income (like wages, freelance income, or a part-time job). Withdrawals from IRAs or Social Security benefits don’t count toward this.

For 2024:

• You can contribute up to $7,000 (age 50+)
• Your Modified Adjusted Gross Income (MAGI) must be below:
  • $230,000–$240,000 (married filing jointly)
  • $146,000–$161,000 (single filers)

Bonus Tip: If your spouse is working and you’re not, you may still qualify through a spousal Roth IRA contribution.

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You Can Also Convert Funds from a Pre-Tax IRA to a Roth—Without Penalties

Once you’re over 59½, you can withdraw from a Traditional IRA or 401(k) without the 10% early withdrawal penalty. This opens the door to Roth conversions:

• You can convert any amount from your pre-tax account to a Roth IRA.
• You’ll pay ordinary income tax on the converted amount, but future growth is 100% tax-free.
• You don’t need earned income to do a conversion.
• There’s no limit to how much you can convert.

Why this matters:

• Roth conversions help reduce future Required Minimum Distributions (RMDs).
• They can lock in today’s lower tax rates and increase their tax-free income later in life.
• If you plan carefully, you can avoid pushing yourself into a higher tax bracket.

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Example: The Roth Double Play

Linda, age 61, is semi-retired. She:

• Earns $12,000 a year from part-time consulting
• Has $450,000 in a Traditional IRA
• Wants to lower her future taxes and build a tax-free bucket

Linda can:

• Contribute $7,000 to a Roth IRA using her earned income
• Convert $25,000 from her Traditional IRA to Roth (no penalty)
• Pay taxes on the conversion from cash savings or part of the IRA withdrawal

Result: She grows her Roth both through contributions and conversions, while trimming down future RMDs and increasing flexibility in retirement.

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If you’re over 59½, you’re in a golden window of opportunity. You can:

• Make Roth IRA contributions (with earned income),
• Execute penalty-free Roth conversions (even without earned income),
• Strategically shift your retirement savings from tax-deferred to tax-free.

This kind of tax planning can add tens or even hundreds of thousands of dollars to your long-term net worth, especially if you act before RMDs or Social Security benefits push your income higher.

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3. Can I invest my HSA like a retirement account, even if I plan to spend it on healthcare later?

Absolutely—and you should. Health Savings Accounts (HSAs) are one of the most overlooked retirement investing tools.

Here’s why they’re called the “triple tax advantage” account:

1. Contributions are tax-deductible
2. Growth is tax-free
3. Withdrawals are tax-free if used for qualified medical expenses

But here’s where it gets powerful: there’s no rule saying you must spend your HSA now. If you pay out-of-pocket for healthcare and save your receipts, you can let your HSA grow tax-free for decades, then reimburse yourself in the future.

Smart move: Invest your HSA in low-cost index funds and treat it like a Roth IRA. Use it last—not first.

And in retirement? You can withdraw the funds tax-free for medical expenses anytime, or use it for non-medical expenses after 65, just like a traditional IRA (though you’ll pay income tax on those withdrawals).

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4. Should I diversify my retirement investments across different custodians or brokerage firms?

Most people keep all their retirement accounts at a single firm like Vanguard or Fidelity. That’s simple—but it’s not always strategic.

Here’s what you probably haven’t considered:

• Custodian risk is real. While rare, having all your assets with one company could cause delays if that firm experiences outages, fraud, or financial distress.
• Investment menu limitations. Some firms don’t offer access to alternative assets, private REITs, or other strategies.
• Tax reporting clarity. Separating Roth, Traditional, and inherited accounts across firms can help avoid commingling and pro-rata tax confusion.

Creative idea: Use Vanguard for long-term retirement investments and Fidelity for flexible tax planning (like Roth conversions and taxable brokerage accounts). Add a third platform for an HSA or alternative investment sleeve.

This isn’t about paranoia—it’s about flexibility, security, and strategy.

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5. Should I convert my IRA to a Roth during a bear market?

This is one of the most overlooked wealth-building moves available—and it can have a huge payoff.

When the market drops (like it did in early 2020 or late 2022), your IRA balance may shrink temporarily. That means a Roth conversion allows you to:

• Pay tax on a lower value
• Transfer future growth into a tax-free account
• Lock in long-term tax benefits

Let’s say your IRA was worth $500,000, but a bear market knocks it down to $400,000. If you convert during the downturn, you’re paying tax on $100,000 less, and when it rebounds, all future growth happens inside your Roth IRA, tax-free.

⚡ Tax trick: Pair this with a year of lower income (e.g., early retirement) to stay in a lower tax bracket. This can save tens of thousands over your lifetime.

The key? You must have outside cash to pay the taxes, and the discipline to hold onto the Roth for at least five years (and ideally until retirement).

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Final Thoughts

Retirement investing is about more than saving money—it’s about making strategic, informed decisions that most people overlook.

Whether it’s using a spouse’s income for Roth contributions, stashing HSA receipts for future reimbursements, or pulling off a perfectly-timed Roth conversion during a market slump, there are dozens of little-known tactics that can turbocharge your retirement strategy.

And the best part? These strategies don’t require you to be rich—just informed.

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Ready to take your retirement investing to the next level?

Let’s build a plan that goes beyond the basics. Schedule a free consultation and discover what smarter investing looks like for you.

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