Business Innovators Radio - Interview with Michael Clanin, Certified Financial Fiduciary® with Safe Money Solutions Discussing Roth Conversion Strategies

Episode Date: May 28, 2026

Michael has been in the financial and insurance business for over 20 years. He works with clients in the areas of Tax-Free Wealth Creation, retirement planning, lifetime income solution, legacy planning and business and Estate Planning. He is an advocate for the safety and protection of his client’s hard-earned retirement money.Michael is committed to delivering outstanding professional service to his clients and acting with honesty and integrity. He takes great pride in building long-term relationships with his clients to achieve their financial goals during working years and during enjoyment years.Michael’s mission is to help clients avoid losing money in the market, and instead build wealth safely, securely, and most importantly, provide lifetime income streams that will be there throughout your enjoyment years and then finally transitioning assets onto next generations more tax efficiently and possibly Tax-Free.Michael is a former educator, so naturally, his approach in working with clients is through guidance and education. He enjoys spending time with family, traveling, hiking, biking, and reading.Learn more: https://safemoney123.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-michael-clanin-certified-financial-fiduciary-with-safe-money-solutions-discussing-roth-conversion-strategies

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us Michael Clannon, who's a certified financial fiduciary with safe money solutions, and we'll be talking about Roth conversion strategies. Michael, welcome back to the program.

Well, thanks again for having you back. I must be doing something right. Yeah, yeah. You've got a unique way of presenting your ideas. It's been really enlightening to chat with you. So I think that if someone were to Google Roth conversion, they'd get four bazillion results and get confused before they get past page one. So let's clarify all of that and talk about number one, just define.

what is a Roth conversion to start with? Well, a Roth conversion is basically, you know, where individuals have all, they have all, they've been building up all this wealth, right, during their working years, right? Whether it's in a 401k, IRA, 403B, 457, simple, stuff, blah, blah, blah, blah, right? All the letter is an alphabet, numbers in alphabet, right? They're all out there, right? And now they're looking at, wow, I've saved a lot of money. money, this account has grown, but all they've done, Mike, is they've kicked the can down the road to face that big, ugly, hairy monster at some point. Either they've themselves or whoever they inherits that money, kids, children, grandkids, charities. Well, charities, that's different. But, you know, family, loved ones, you know. And now they, you know, Roth conversion is right. How to divorce the IRS?

for free in my situation, because I show my clients how to do it for free in a roundabout way, right? But getting it out of the tax environment to the tax free, right? I transition, regardless if it's the Roth conversion or anything, I'm trying to transition my clients from a taxable world to a tax free world. Yeah. Yeah, that ugly tax word that we keep bringing up, it's like the biggest hole in the financial bucket out there because so many times we, we feel like, oh, well, I can control my expenses or I can control this, but we can't control taxes. No, and that's a really, really big way. That actually is the largest expense in retirement even.

Yeah. But even during working years, right, we paid taxes on everything, goods, goods and services we buy, you know, even a death tax when you die. There is tax that comes due. Well, probably if we were to pull 10 people on the street and go, hey, the next 10 years are taxes going up or down? Obviously, we know the answer. Yeah, you know, well, most people do. Of course, going up, but I still have people say, oh, don't go down or they're not going to go anywhere for a while. Well, I can tell you, we're in the lowest tax environment since 1980.

So what does that tell? Here's what it should alert you is taxes are on sale. It just doesn't feel like it because we've been in this environment for so long. I mean, we've had, if we go back to World War II, the highest marginal tax bracket was 94%. That means those high earners were only keeping six cents. That was very similar in 1980s. That's amazing. So why wouldn't you want to pay taxes on this harvest that you've created, right?

Why wouldn't you want to pay taxes at the lowest income rate now or tax bracket now? Well, people don't want to pay the taxes out of it. of their, they don't want to face the Piper and pay the taxes. They want to keep deferring it. Kick the can down the road. Yeah. They're just making their situation and their loved one situation even worse. So basically in a broad sense, a Roth conversion is a possible strategy that might work for someone.

Everyone's situation is different where you're going to actually start triggering taxable events and taking money out of your IRA 401 type of accounts that's not been taxed yet. you're going to pay your taxes, but you're going to put it into a vehicle where it's going to grow tax-free. And the theory, the strategy is most probably taxes are going to go up from here based on what you just said from the past. So how can someone figure out or determine if this strategy might benefit them in their specific situation? Because it definitely is not a solution for all. Right. No, there's definitely, it has to be a good fit.

It's like you said, it's not a strategy for everybody. You know, we know that people can start doing this. Well, technically any time, if somebody has these retirement plans, even at an employer, and they left that employer, right, they can move that money into an IRA and start this conversion. You know, I even did this with my son who was 24. I said, let's stop you contributing. And we converted it. I just converted my own this last month.

Why? Or last year. Why? Because I was in a lower tax bracket because of my situation. Right? This trust structure we talked about earlier, that put me in the lowest tax bracket. So why when I paid the taxes? But here's the thing.

When we're doing the Roth conversion, we're not only looking at the taxes, we're looking at what else is going to come in play when we do those conversions? because when you start converting beyond age 63, now you have, now you have Medicare comes into the equation. That Aunt Irma, that's a surcharge based on your, you know, income monthly adjusted, you know, account value. It's based on what, you know, you're making, you're bringing in on the tax. side, which distributions are taxes, ordinary income. Then we have to look at, oh, the widow's trap.

The widow's trap is when you're collecting Social Security or income from IRAs and, you know, one of you dies. Now you go from a single filer or a married couple filing jointly to a single filer and you're receiving the same income.

So that's going to push you up into a new bracket. Right? And then we already talked about the legacy, you know, your kids are probably going to pay more taxes at their rate. Not only because their income goes up, but the tax brackets are going to increase. So what you thought you were doing was giving was a good thing to leave them money this way. You actually made their situation worse. Yeah. Right.

So I take it all this into consideration. So here's the thing. I already kind of explained why people delay. it. Number one, they don't need the money, but they also don't want to pay the taxes. Yeah. Well, I have a solution. I let somebody else pay the taxes based on the type of planning I do. Okay. And that is, I let insurance companies pay the taxes because we have a vehicle that allows, they add money to your account. And we use that money plus the growth to pay the taxes in a roundabout way with money you didn't have to begin with. So by the time we're

done with the conversion, guess what? They have their principle still intact and there's still growth that didn't have to go to pay the taxes. So that little extra bonus amount you're mentioning there, you can actually take it out of the account to pay your taxes because it's a Roth where you can withdraw. There's no there's no penalties for that. So that's a that's an interesting thing to keep in mind. If I'm going to get taxed X number of dollars, but the insurance company gave me the same amount, well, it's a wash. Yeah, right, exactly.

And the thing is, not only that, I mean, we're not, you know, we're not doing a Roth conversion one year unless it's, you know, a very low amount, right? I mean, we're talking, it could be three to five years, but the idea is to get everything out of the tax environment by age, by the end of age 62 at the late, latest because when you go on Medicare, they're going to look back two years of tax return.

So your Medicare surcharges is going to be based off of what you made or the income when you're 63. So if we get that, if we get the problem solved before 862, none of this comes into play. No widows trap. No aunt Irma Medicare. No, when you die, right, it's going to go tax free. right? So we've eliminated all of those exposures because you made the choice to do it. Okay. Now, some of those people who are still working, for example, Mike, and they're contributing to the 401k and they're over 509 and a half, they can move monies while they're working and still contribute, but they can move that money and start the conversions.

That's called it in-service withdrawal. So it is based on their plan and that. But, but. But an IRA can be converted any time. There is no age. I said my 24 year old, right, did his last year. So, you know, because I want to set him up where he's not going to be in a taxable environment as much as possible, right, except his W2. Let's pay the taxes on the seed, not the harvest. Yeah. You know, and you bring up a good point there where, of course, everyone's different, like we've said.

And if you have a large amount that you are looking to convert, it might not be click, click, convert done because you might trigger a huge, you might bust through two or three brackets and be at the highest. So then you would want to look back and go, okay, well, why don't we split it into this many multiple years? So that would be part of that analysis is to look and see what's best for that person, depending on their numbers. Yeah, and sometimes we do have to go in those higher tax brackets. but it's a temporary. It's temporary, right? So if it's a three-year and it kicks you over or four-year conversion where we're converting, you know, over those periods,

it's going to probably kick you in the higher ones if we want to convert it within a certain time. If we don't have the time on our side, that's usually what we have to do. Now, if you have time on your side, it's up to you. How quick do you want to divorce the IRS and quit donating that money? Right? You know, the thought that I think a lot of times people may have is, you know, if I trigger a tax event now where the taxes are low, I get that and let's do that and put the money in a Roth so it can grow tax free. That's great. It's just going to take so much time to recoup, meaning this.

Let's just pick the number 20,000. If I trigger $20,000 worth of taxes this year because of taking a certain number out of my I. and I put it in a Roth. Yay, it's going to grow tax-free, but how much did it grow this year? Not 20,000. The next year, not 20,000. So it's going to take a long time. But what you're talking about is that kind of washing effect where you can recoup that

immediately. Well, now you're back at ground zero. And then the timeframe to see the benefit starts right away. Am I thinking correctly that way? Yeah, exactly. Exactly. In fact, I use, there's a program I use. It's called Roth Blueprint.

And it shows if you keep doing what you're doing, right, and oh, most of the people have all their money in the market, right? So, you know, can they lose money? Of course. So if they're losing money, they're not going to make as much money, right? Versus when we're doing the Roth conversion, you know, we're using an insurance-based product. And it's temporary where they can then put it back. in the market or they can keep growing their money safely and that. But for example, I had a client and I'm just looking at right now. He has a million dollars in a qualified account, right? By doing

the Roth conversion, he's going to save, let's see, what was it? Almost $2 million in taxes. By doing the Roth conversion. I had another client who is going to convert $5 million. He's saving $13 million. So again, we can't look at the short term, right? Hey, it's going to kick me in the higher bracket, right? How do you save $13 million with a $5 million account? Oh, well, that's over, that's through age 90.

So if they just did the conversion, left it along, right? We haven't talked about when they need income. Yeah. We'll talk about that, right, later. But now we need to generate income, right? But the whole thing is, do you want your money to be growing where you're in the, you're that, I always say this, you're the annuity to the IRS. Yeah.

They love you. They love you. And they have let you defer. In fact, they're pushing those. They pushed the deferral, right? It was 71. Grow, grow, grow. Right?

Then it went to 72, then 73, and then I think it's 20, 32. It's going to be 75. Why? Because they want those accounts to grow. So there's more money, right? So your money. They're guaranteed income. Right.

Your money in your 401k IRA is not your money. Half of that is Uncle Sam. Because that's potentially what you could be paying in taxes is up to 50% between federal and state. So if you do this the right way, sequentially, logically, really carefully, all these things sound wonderful. What are some potential drawbacks? Because we want to look at the other side of the equation too. Yeah.

Right. So a couple things. When we're doing these Roth conversions, most, like I said, most people are in the market, right? Well, there's no guarantees in the market. Yeah. So the thing is we want to be able to transition that, whether it's temporarily or permanently, we want to transfer that into a safe annuity. Let's just call that word out an annuity.

Okay. We're going to transfer it into an annuity that cannot lose money, because your money is not directly in the market. It's tied to an index. If that index goes up, think of a stair step, right? You're at the bottom stair step. If your account, if the index goes up, guess what? your account goes up. If that index goes negative, you stay on that same step.

And then next year, if it goes up, okay? So you can never go backwards. But the thing is, why do we need guarantees of not losing money? Because we need to have that money available for the growth. And the bonus that the insurance companies give us this added day one, or some of it's added day one, we need to have. to be able to offset the taxes. So in the end, you keep your principal intact.

See, if you do it your way, your account's going down. And if the market is down and you're pulling money out to do that, you're getting even more. Right. You know, so that, so that's one, right? You may have to temporarily, temporary leave, leave the market. Okay. the other is

what was the other one I was thinking of well the volatility right the volatility yeah you don't get as much upside on the vehicle doing what we're doing but we also know you're not losing any money and here's the thing as you get closer retirement

you should be moving to safe alternative investment are not in Bethleh, safe alternative solutions. Yeah. Okay, I'm not saying don't have your money in the market, but protect the money that you need to generate income that you need to cover your basis. Okay. Yeah, like if you need that number of dollars a month to put food on the table and pay the light bill, have that amount in the safe guaranteed amount. And then if you want a little extra in the market, weather the storms.

Yeah, yeah, exactly. Right. And the other thing is, and I know we're kind of getting off topic a little, but it's still part of it. Here's the thing. I'm using these different vehicles, right? I'm putting my client in the position. Not only do we not have to worry about taxes ever again on that money because it's growing tax-free, but these vehicles can also provide lifetime guaranteed income that you can never,

outlive the cash flow. Meaning you can go through your money, but you're still getting that paycheck on a regular basis. Just like your Social Security. Yep. Just like your pension if you have that. Okay. No matter what.

You know, I want to go deeper on that, but I want to first go back to a point you made a minute ago where I think a lot of times people have heard of Roth conversion. And it's like you trigger the tax event and you got to have enough time that goes by and do this so far ahead of retirement that you're going to actually start recouping, you know, the amount you paid out through your, your back pocket to taxes. So you better do this in your early 50s. Well, if you're not in your early 50s and you're in your early 60s, well, then it's too late. Well, that may not be the case because the way that you're talking about is you've got

some ways to get that tax burden covered. And now your money in the Roth is liquid, available, growing tax-free, and you don't need to feel like, oops, I missed that window a decade ago. That should have done this a decade ago. Yeah, I mean, that's the biggest thing. It's never, it's never too late. We just have to make sure, is this a good strategy for you? I mean, I haven't come across very many people that isn't. But, you know, if somebody needs income right now, well, then the Roth conversion is not going

to be the way to go. They may still, they're just probably going to keep their money in their IRA. and move it into a vehicle that's going to provide a guaranteed cash flow, even after their account goes to zero, but they're going to pay taxes. They're always going to be subject to the taxes forever going forward, okay? And that. And I was kind of, you know, individuals that have the monies in the market, right?

And they're doing the Roth conversions or pulling or doing withdrawals and the market's down. They can go through their money and when that account goes to zero, game is over. There is no money. They are not going to send you money. That's what insurance-based products do are guaranteed, contractually guaranteed in writing. As long as you're alive, it's going to provide this income not only for you, but your spouse. So the whole thing is you're going to collect a lot more money than you put in.

Yeah. I guess if someone is out there and they've seen online or social media, something about, a Roth conversion, get it checked out, get a second opinion before you pull any trigger, get someone like yourself, Michael, to look at all the angles. And if someone is interested in getting a little bit more of that information or a second opinion to kind of map out that blueprint, what's the best way that they can do that and reach out and connect with you? Yeah, just go to our website. It is safe. You can't lose. Safe, S-A-F-E, Money, 123.com. You can see how I came up with that, Mike, right? I'm a former teacher. I've got to keep being simple. Yep. Love it. Well, thank you so

much for coming back on, Michael. It's been a pleasure talking with you. Great. Thanks a lot. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www.com.