Keep pulling the thread on Bill Artseronian.
The SECURE Act 2.0, enacted under the Biden administration, established a 10-year rule for the depletion of most inherited IRAs.
Bill Artseronian of Ritholtz Wealth Management advocates for 'tax diversification,' which involves holding assets in pre-tax (e.g., traditional 401k), after-tax (e.g., brokerage), and tax-free (e.g., Roth) accounts to provide future financial flexibility.
The 'mega backdoor Roth' strategy allows individuals to contribute up to the total 401(k) limit, which is $70,000 in 2025, by making after-tax contributions beyond standard employee and employer amounts if their plan permits it.
Bill Artseronian suggests that within a tax-diversified portfolio, assets in a Roth account should be invested more aggressively because they are theoretically the last funds to be withdrawn in retirement.
The 'mega backdoor Roth' contribution strategy is becoming more widely adopted by employer 401(k) plans.
Bill Artseronian advises that converting pre-tax retirement funds to a Roth account is a beneficial strategy for investors in their 20s and 30s to maximize long-term, tax-free growth.
Ritholtz Wealth Management utilizes direct indexing in partnership with the O'Shaughnessy team to generate tax losses that can be used to offset capital gains from concentrated stock positions.
According to Bill Artseronian, death is a significant tax planning event because heirs receive a 'step-up in basis' on inherited assets, which effectively eliminates the deferred capital gains accumulated during the original owner's lifetime.
Without the passage of the 'One Big Beautiful Act' tax bill, the highest marginal income tax rate in the U.S. would have increased from 37% to 39.6%.
A strategic Roth conversion allows parents to pay income tax on retirement funds at their potentially lower tax rate, such as 24%, to provide more tax-efficient inherited assets to children in a higher tax bracket, such as 37%.