In this month's newsletter: Navigating Market Uncertainty, Strategic Roth Conversions, Highlights from our Super CPA Continuing Education Event — Plus a New Section Featuring Guest Voices on Travel, Leisure, Gardening, or Whatever Inspires You
June 2025
Capital Markets
Navigating Market Uncertainty: Two Scenarios for the Road Ahead
Marc Zabicki, Chief Investment Officer at LPL Financial, discusses two potential market scenarios following a 15% or more decline: a V-shaped recovery, which typically happens after a market shock like tariffs, and a more prolonged weakening where markets recover but then decline again due to fundamental economic changes. The current market is more likely to follow the second scenario, urging investors to remain vigilant and consider a cautious approach like dollar cost averaging.
Did You Know?
Is a Roth Conversion Right for You?
If the grass looks greener on the tax-free side of the retirement income fence, you may want to consider a Roth conversion.
In 2019, almost 46 million households owned Individual Retirement Accounts (IRAs), and the accounts held more than one-third of Americans’ retirement savings. Most of the money was saved in workplace retirement plans before being rolled over into IRAs, according to statistics from the Investment Company Institute. [1, 2]
When it comes to IRAs, there are two basic types of accounts: [3]
Traditional
Contributions to traditional IRAs often are made pre-tax. The money can grow and compound tax-deferred until retirement. When an individual takes a withdrawal from a traditional IRA during retirement (after age 59½), the distribution typically is taxed as ordinary income.
In addition, individuals must begin taking required minimum distributions (RMDs) at age 72, unless they reached age 70½ in 2019 or earlier. (In that case, they’re already taking RMDs.) [3]
Roth
Contributions to Roth IRAs are made with after-tax money. The money grows and compounds tax-free. When people take qualified distributions from Roth IRAs, they usually do not owe taxes on the amount withdrawn, as long as certain requirements are met.* Roth IRAs are not subject to required minimum distributions. [3]
*Roth contributions can be withdrawn at any time without penalty. Roth earnings can be withdrawn tax and penalty free as long as a qualified distribution is taken at least five years after the year the first Roth contribution was made, at or after reached age 59½, after total disability or death, or upon meeting the requirements for a first-time home purchase.
Not everyone is eligible to open or make contributions to a Roth IRA. In 2020, people who have modified adjusted gross income equal to or greater than $139,000, if they file taxes singly, or $206,000, if they file taxes as married couples, are not eligible to contribute to a Roth IRA. [3, 4]
There is a way to get around the income restriction. A Roth conversion allows anyone, regardless of income level, to convert all or part of a traditional IRA account to a Roth account. The amount transferred from a traditional to a Roth IRA is treated as income and subject to ordinary income tax. As a result, accountholders should carefully consider whether they can use non-retirement funds to pay taxes owed on the conversion. [5, 6]
Roth IRAs can be valuable legacy planning tools
Many people consider Roth IRA conversions because Roth IRAs have potential to provide tax-free retirement income. Not everyone realizes Roth IRAs can provide tax-free income over generations. A Roth conversion can be an important part of a legacy planning strategy, especially today.
The 2017 Tax Cut and Jobs Act reduced taxes for many Americans, which made Roth conversions more attractive. Then, in 2020, the Setting Every Community Up for Retirement Enhancement (SECURE) Act eliminated a provision known as the stretch IRA, which allowed non-spouse heirs to inherit IRA accounts and stretch distributions from those accounts over their lifetimes. [7, 8]
As a result of these changes, Roth IRAs have become powerful and attractive estate planning tools that can help minimize taxes over generations. The benefits of Roth conversions may include: [3]
Receive tax-free income. Having a source of tax-free income can help optimize retirement and tax planning strategies.
Keep your assets until you need them. Roth IRAs don’t have required RMDs. This means the accounts can grow and compound until you or your heirs need income.
Leave more for your heirs. If your beneficiaries have high incomes, they won’t have to worry about the potential impact of inherited IRA distributions on their taxes.
Roth conversions have many potential advantages, but they are not simple transactions. Traditional IRA owners should talk with their tax professional, financial professional, and/or estate planning attorney to determine whether a conversion makes sense. Among other things, the Journal of Accountancy suggests they should consider: [6]
Conversion alternatives, such as making qualified charitable distributions from traditional IRAs
The effects of conversion income on the calculation of taxable Social Security benefits and Medicare premiums
The effects of the conversion income on the qualified business income deduction, if applicable
The phaseout of many deductions, credits, and allowances
Bear in mind, there may be a limited window for conversion, however, because the new administration plans to “raise taxes on individuals with income above $400,000, including raising individual income, capital gains, and payroll taxes,” reported the Tax Foundation. [9]
If you have questions about Roth conversions, please get in touch.
Hanging out with us in the Plum Tree!
Success Spotlight:
Super CPA Luncheon Delivers Continuing Education Credits
On Wednesday, May 7th, PlumTree Financial, in partnership with Transamerica, hosted a Super CPA CE (Continuing Education) Luncheon, focused on helping CPAs stay on top of recent estate and trust planning developments. The event proved to be a major success and was well attended by local CPAs.
Attendees earned 20 continuing education credits, making the luncheon both informative and career-advancing. Attendees praised the event for its actionable insights, opportunities for continued professional growth, and valuable networking connections.
By hosting educational events, PlumTree Financial is demonstrating our commitment to being a leader in the industry and sharing expertise, not just as a service provider, but as a trusted partner and thought leader. Through collaboration with other professionals in the accounting field, we are continuously learning and evolving to better support our clients’ needs.
Plum Picks: Where Petals Meet Passports
Welcome to your monthly blend of blooming gardens and global getaways. Just like a well-tended garden, our journeys — and interests — grow best when nurtured with curiosity, care, and a little sunshine.
In this section of the monthly newsletter, we explore what is thriving: from trending travel spots to client-loved pastimes like gardening, wellness, and cultural discoveries. Whether your roots are planted at home or you are chasing new horizons, there is something here to inspire every kind of explorer.
Have a story to tell, a garden tip to share, or a favorite travel memory in full bloom? We would love to feature you!
If you would like to be a guest contributor, please reach out to clients@plumtreefinancial.com.
Let us grow this community from the ground up.
Upcoming Events
July 16, 2025 |12pm EST
Save the Date! LPL Research Midyear Outlook
In this upcoming webinar, a member of LPL’s Market Research team will provide a MIDYEAR market update.
Want to gain perspective on the changing Markets: Where have they been? Where are they now? Where do we think they're going?
Please join us for another informative webinar with returning guest speaker, Mark Peterson, the author of the popular “Student of the Market” monthly publication that is distributed widely to advisors across the country.
Individual Retirement Accounts (IRAs): FAQs. (2021, October 11). Investment Company Institute. https://www.ici.org/faqs/faq/iras/faqs_iras
Investment Company Institute. (2020). Ten important facts about IRAs. https://www.ici.org/pdf/ten_facts_iras.pdf
Traditional and Roth IRAs | Internal Revenue Service. (n.d.). https://www.irs.gov/retirement-plans/traditional-and-roth-iras
Amount of Roth IRA contributions that you can make for 2024 | Internal Revenue Service. (n.d.). https://www.irs.gov/retirement-plans/plan-participant-employee/amount-of-roth-ira-contributions-that-you-can-make-for-2020
Cgma, B. K. T. M. C. (2020, October 1). Time to consider a Roth conversion. Journal of Accountancy. https://www.journalofaccountancy.com/issues/2020/oct/roth-ira-conversion.html
Dba, B. T. a. C. C. P. a. C. a. L. C. (2020, July 1). The SECURE Act’s changes. Journal of Accountancy. https://www.journalofaccountancy.com/issues/2020/jul/secure-act-tax-changes.html
Watson, G. (2023, November 22). Biden tax Plan: details & analysis | Tax Foundation. Tax Foundation. https://taxfoundation.org/joe-biden-tax-plan-2020/
Disclosures
Navigating Market Uncertainty: Two Scenarios for the Road Ahead
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth in the podcast may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. All indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
All index data is from FactSet or Bloomberg.
Municipal bonds are subject to availability and change in price. They are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply. If sold prior to maturity, capital gains tax could apply.
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This Research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
Not Bank/Credit Union Guaranteed
Not Bank/Credit Union Deposits or Obligations
May Lose Value
RES-0004066-0425 | For Public Use | #745655 (Exp. 05/26)
Is a Roth Conversion Right for You?
Securities and Advisory services offered through LPL Financial.
This material was prepared by Carson Coaching. Carson Coaching is not affiliated with the named broker/dealer or firm.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
In general, a distribution from a Roth IRA is tax-free and penalty-free, as long as the account has been open for five years and the account owner is age 59½, has become disabled, is making a qualified first-time home purchase ($10,000 lifetime limit), or dies. Minimum required distributions do not apply to the original account owner, although they may apply to heirs.
This is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor
LPL Compliance Approval # 1-05092999
Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.
