Bull Financial

05/14/2026

𝗦𝗵𝗼𝘂𝗹𝗱 𝗬𝗼𝘂 𝗖𝗼𝗻𝘃𝗲𝗿𝘁 𝗔𝗹𝗹 𝗬𝗼𝘂𝗿 𝗥𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁 𝗙𝘂𝗻𝗱𝘀 𝘁𝗼 𝗮 𝗥𝗼𝘁𝗵 𝗜𝗥𝗔?

A Roth IRA can be a powerful tool in retirement because qualified withdrawals are tax-free and you're not forced to take RMDs during your lifetime. But that doesn't mean you should rush out and convert your entire traditional IRA or 401(k) this year.

Every dollar you convert adds to your taxable income. Too much in one year can push you into higher tax brackets, increase how much of your Social Security is taxed, and even raise your future Medicare premiums. Too little, or waiting too long, can leave you with large required minimum distributions later and a bigger tax problem for you or your heirs.

For many people, the answer isn't "all or nothing," but a thoughtful, multi-year plan to convert a portion of their pre-tax accounts each year while staying in reasonable tax brackets. That's why at Bull Financial we treat this as a "puzzle in motion" and walk through a planning session that looks at taxes, income needs, and legacy goals together-not in isolation.

If you're in your 50s or 60s and wondering how much you should convert-and when-a Puzzle in Motion planning session can help you see the whole picture and make more informed decisions about your Roth strategy.

👉 Visit https://www.bull.financial/ or call 864-469-5991

05/06/2026

𝗕𝗲𝘁𝘁𝗲𝗿 𝗺𝗼𝗻𝗲𝘆 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁. 𝗕𝗲𝘁𝘁𝗲𝗿 𝘁𝗮𝘅 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴. 𝗕𝗲𝘁𝘁𝗲𝗿 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴.

We understand how hard you've worked for what you have - and we know that every dollar lost or unnecessarily spent is gone forever. That is why we focus on protecting your retirement from market downturns, excessive taxes, and rising Medicare costs.

At Bull Financial, financial planning is more than just investing. It's adapting to your life, reducing your lifetime tax burden, and helping you retire on your terms.

Let's talk about what is possible for your retirement.

👉Visit bull.financial or call 864-469-5991

04/28/2026

𝗨𝘀𝗶𝗻𝗴 𝘁𝗵𝗲 𝗧𝗵𝗿𝗲𝗲 𝗧𝗮𝘅 𝗕𝘂𝗰𝗸𝗲𝘁𝘀 𝗶𝗻 𝗥𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁

Most people think about diversifying what they invest in, but not how those investments are taxed in retirement. That’s where the three tax buckets come in.

Bucket 1 is your taxable money – brokerage accounts, bank accounts, CDs. You’ve already paid income tax on the contributions, but interest, dividends, and realized gains show up on your tax return each year. Used wisely, this bucket can provide flexibility and access, but unmanaged it can quietly increase your tax bill over time.

Bucket 2 is your tax-deferred money – traditional 401(k)s, 403(b)s, 457s, and IRAs. You often receive a tax break on the way in, and the growth has been tax-deferred for years. But every dollar you withdraw is taxed as ordinary income, and required minimum distributions later in retirement can push you into higher brackets and impact how much of your Social Security is taxed.

Bucket 3 is your tax-free money – Roth IRAs, Roth 401(k)s, and, in some cases, HSAs or certain types of life insurance. You fund these with after-tax dollars, but qualified withdrawals are income tax free, and Roth IRAs don’t have required minimum distributions for the original owner. That gives you powerful control over your future tax bill.

The goal isn’t to guess the “perfect” bucket, but to build balance across all three so you can decide which dollars to spend and when helping you keep more of your retirement income after taxes, not just before.

https://www.bull.financial/

10/01/2025

RETURNS MATTER. TAXES MATTER. PLANNING MATTERS. CLIENTS MATTER. SECURE YOUR FUTURE NOW!

These are not fixed templates; instead, each criterion involves unique details that must be carefully evaluated. Additional expertise may be required when addressing areas such as business planning, cash flow management, or estate planning.

02/04/2025

529-to-Roth IRA Rollovers: Leveraging New Opportunity

The challenge of determining how much to save in a 529 plan has long been a balancing act for families aiming to fund higher education. While 529 plans offer significant tax advantages—such as tax-deferred growth, tax-free withdrawals for qualified educational expenses, and potential state-level tax deductions—the downside is that funds withdrawn for non-qualified purposes are subject to income tax and a 10% penalty on the earnings portion. This creates a dilemma for families who save more than needed or whose beneficiaries choose non-traditional educational paths. The SECURE 2.0 Act of 2022 introduced a solution: the ability to roll over unused 529 funds into a Roth IRA, albeit with several restrictions.

The SECURE 2.0 Act’s 529-to-Roth Rollover Provision

The SECURE 2.0 Act allows 529 plan beneficiaries to roll over up to $35,000 in lifetime contributions into a Roth IRA, providing an "escape valve" for overfunded accounts. However, this opportunity comes with strict limitations:

The 529 plan must have been in existence for at least 15 years.

Contributions made within the last five years (and their associated earnings) are ineligible for rollover.

The annual rollover amount cannot exceed the IRA contribution limit for that year (e.g., $7,000 in 2024 for those under age 50).

Beneficiaries must have earned income to match the rollover amount.

These rules ensure that the provision remains a safety net rather than a loophole for high-income earners to bypass Roth IRA contribution limits.

Benefits and Limitations

While the $35,000 lifetime limit restricts how much wealth can be transferred into tax-free retirement accounts, the provision still offers meaningful benefits. It allows families to repurpose unused educational savings for retirement without incurring penalties or taxes. For parents or grandparents, it also provides a way to gift future retirement savings while maintaining some control over how the funds are used.

However, the restrictions on timing and amounts limit its flexibility as a broader financial planning tool. For instance:

The 15-year rule may complicate rollovers if the beneficiary has changed during that period.

Contributions made within five years of the rollover date are excluded, reducing the pool of eligible funds.

The annual rollover cap tied to IRA contribution limits means it could take several years to reach the $35,000 lifetime limit.

Despite these constraints, the provision is particularly useful for families who inadvertently overfunded their 529 plans or whose beneficiaries chose alternative career paths.

Planning Opportunities

Educational and Retirement Savings Hybrid

The new rules effectively transform 529 plans into dual-purpose accounts that can support both education and retirement savings. Families can now consider slightly overfunding a 529 plan with the intention of rolling over any excess into a Roth IRA later. This approach provides flexibility while ensuring that funds remain earmarked for long-term goals.

For example, a parent contributing $10,000 today could see that amount grow significantly over time (assuming an average annual return of 8%). After meeting the 15-year requirement, these funds could be rolled into a Roth IRA in increments aligned with annual contribution limits.

Strategic Gifting

For parents or grandparents looking to support younger generations, contributing to a 529 plan offers an option to provide both educational and retirement benefits. Unlike unrestricted cash gifts, which can be spent immediately, contributions to a 529 plan or subsequent rollovers into a Roth IRA ensure that funds are used for forward-looking purposes like education or retirement.

Avoiding Overfunding Pitfalls

Families should still exercise caution when funding 529 plans. Overfunding beyond what is likely needed for education expenses could leave excess funds trapped if they exceed the $35,000 lifetime rollover limit. In such cases, families may face taxes and penalties on non-qualified withdrawals unless another eligible beneficiary is named.

State Tax Considerations

While rollovers are tax-free at the federal level if all requirements are met, state tax treatment varies. Some states treat rollovers as non-qualified distributions subject to state income tax or recapture previously claimed deductions or credits. High-tax states like California and New York may impose additional penalties on earnings rolled over into Roth IRAs. Families should review state-specific rules before executing a rollover.

Practical Considerations for Rollovers

Timing and Eligibility

Families must carefully plan when to initiate rollovers. The account must meet both the 15-year maintenance requirement and the five-year contribution rule. Additionally, beneficiaries must have earned income in the year of the rollover equal to or greater than the amount rolled over.

Roth IRA Withdrawal Rules

Funds rolled into a Roth IRA are subject to standard withdrawal rules:

Earnings can only be withdrawn tax-free after age 59½ and if the account has been open for at least five years.

Principal amounts from rollovers (i.e., contributions) can generally be withdrawn tax-free at any time.

For beneficiaries under age 59½ who need access to these funds early, only principal amounts can be withdrawn without penalties.

Maximizing Rollovers

To make full use of the $35,000 lifetime limit, families should aim to contribute early enough to benefit from long-term growth but not so early that contributions fall within the five-year exclusion window before rollover eligibility.

Symbolic Significance

Beyond its financial implications, the ability to roll over unused educational savings into retirement accounts carries symbolic weight. It reflects an investment in future generations’ stability—whether through education or retirement security—and aligns with broader goals of intergenerational wealth-building.

For example:

A grandparent contributing $10,000 today could see those funds grow significantly by the time their grandchild is ready for college or begins their career.

If unused for education, these funds could provide a head start on retirement savings through gradual rollovers into a Roth IRA.

This dual-purpose approach reinforces long-term planning values while offering flexibility in how funds are ultimately used.

Limitations Compared to Other Strategies

While useful in specific scenarios, 529-to-Roth rollovers are less impactful than other wealth-building strategies like "mega-backdoor Roth" conversions or standard backdoor Roth contributions. These alternatives allow higher contribution limits and greater flexibility without requiring lengthy waiting periods or lifetime caps.

For instance:

A "mega-backdoor Roth" can move up to $69,000 annually into Roth accounts via after-tax 401(k) contributions.

Standard backdoor Roth strategies involve converting nondeductible IRA contributions without lifetime limits.

By contrast, the $35,000 cap on lifetime rollovers from a 529 plan makes it less suitable as a primary strategy for building significant tax-free wealth.

Conclusion

The SECURE 2.0 Act’s 529-to-Roth rollover provision addresses a longstanding concern about overfunded educational savings accounts by offering families an alternative use for unused funds. While its strict limitations reduce its utility as a broader planning tool, it provides meaningful benefits in specific scenarios—particularly as an option for repurposing excess savings toward retirement goals.

For financial advisors and families alike, this rule represents an opportunity to rethink how they approach education funding and intergenerational wealth transfer. By incorporating this provision into broader financial plans, families can maximize flexibility while ensuring their contributions continue to support long-term objectives like education and retirement security.

Schedule a meeting with the link below

https://calendar.app.google/vJLJupndjsM4V8v67

08/27/2024

𝐖𝐡𝐞𝐧 𝐈𝐬 𝐓𝐡𝐞 𝐁𝐚𝐜𝐤𝐝𝐨𝐨𝐫 𝐑𝐨𝐭𝐡 𝐄𝐯𝐞𝐧 𝐖𝐨𝐫𝐭𝐡 𝐃𝐨𝐢𝐧𝐠?

Before reviewing the rules and strategies for efficiently and effectively using the backdoor Roth strategy, let us first address the concern raised by many advisors, clients, and tax preparers, which is some variation of, "This sounds like a lot of work for $7,000 or $8,000"

Going around to the back door makes sense when you can’t get in through the front. Making backdoor Roth contributions is an extension of the broader decision that going with a Roth makes sense for a particular taxpayer. For taxpayers who are concerned they will be in a higher tax bracket in the future, either because their income increases or because tax laws change, backdoor Roth contributions can be a great tool for filling up their tax-free bucket. We should first explore contributory Roth options through employer sponsored retirement plans (which don’t have the income limits that Roth IRAs do) and verify the taxpayer can’t make direct Roth IRA contributions before beginning backdoor Roth contributions.

To understand the value of the backdoor Roth strategy of 'just' $7,000 annually, backdoor Roth contributions of $7,000 in each of the next 20 years growing at 10% annually could produce a tax-free bucket of some $400,000(double, if married.) Which, in round numbers, would save you some $50,000 in taxes.

The Backdoor Roth Strategy Sounds Great, But What Exactly Is It?

It's important to first acknowledge that the backdoor Roth IRA contribution is not officially a 'thing', at least not to the IRS, but rather a tax loophole that the IRS and Congress know about but have chosen not to close (thankfully, the IRS has acknowledged that taxpayers are using this strategy and has not made any focused effort to prevent or crack down on it).

More specifically, the backdoor Roth IRA strategy consists of a 2-step process involving 1) a contribution made to a traditional IRA, followed by 2) conversion into a Roth IRA. This process is designed to get annual contributions into a Roth IRA for taxpayers whose income levels surpass the Roth IRA contribution phaseout range, precluding them from making these contributions. For 2024, the income phaseout for a taxpayer (Married Filing Jointly) making contributions to a Roth IRA ranges from $230k to $240k of Modified AGI (reported on Form 1040 Line 11, with some adjustments)

What is Co-Mingling?

Unfortunately, things get complicated quickly if taxpayers have existing IRA dollars (in any account) and/or if they plan to rollover funds from a qualified account at any point during the year. This is because of the IRA Aggregation Rule which states the value of all IRA accounts will be aggregated together for the purpose of any tax calculations.

Example: Bob, did a $6,500 backdoor Roth. But has $100,000 of pre-tax money in another IRA.

Because of the $100,000 pre-tax and $6,500 after-tax balances, the combined total account value reported on Line 6 of Form 8606 would be $100,000 + $6,500 = $106,500, which means that every future distribution would be approximately $100,000 ¸ $106,500 = 93.9% taxable and $6,500 ¸ $106,500 = 6.1% tax-free.

So instead of Bob's $6,500 being converted wholly tax free as he originally thought would be the case, what actually ended out happening was that only $6,500 ´ 6.1% = $397 was tax free, and the remaining $6,500 – $397 = $6,103 was taxable!

Anything Else I Should Know About Backdoor Roth Conversions?

Anytime we are talking about IRAs, Roths, contributions, and/or conversions, we need to revisit both the 5-year rule that applies to Roth conversions (which serves to determine whether the principal of amounts converted to Roth can be considered penalty-free), and the 5-year rule that applies to Roth contributions (which serves to determine whether a withdrawal of growth from a Roth IRA would be considered a tax-free 'qualified' distribution, and for which separate rules exist for Roth accounts under employer retirement plans).

Any distributions taken from a qualified account are characterized in the following order: first from Contributions, then from Conversions, and lastly from Growth.

The 1st 5-year Rule (for Roth conversion principle) says that account owners under age 59.5 must wait 5 years before they can withdraw the principal of a prior Roth conversion without penalty (ignoring any other qualifying event). Once the client reaches age 59.5, this 5-year rule is no longer an issue.

The 2nd 5-year rule (for Roth growth of any type) says that any Growth on a Roth (from contributions or converted amounts) cannot be withdrawn without penalty until they have had any Roth account open for at least 5 years (and they must be over age 59 ½, or deceased or disabled, or using the money under the first-time homebuyer exception).

If this all sounds complicated and labor-intensive, take a step back to remind yourself that strategies like these can be beneficial and well worth the time and effort they require to implement; taking the time to understand them can result in numerous tax-free dollars.

Bull Financial has vast experience with Roth IRA planning. Everyone’s unique situation creates its own path of action to create their most tax-efficient scenario. Use the link below to schedule a quick 15 minute phone call or Zoom to see if Roth planning makes since and could benefit your financial future.

Barry Barnette

Bull Financial

https://bull.financial/

07/12/2024

ARE REQUIRED MINIMUM DISTRIBUTIONS SATISFIED FROM A ROTH CONVERSION?

Hello!

As the likelihood of higher tax rates increases, many proactive investors are looking to the Roth Conversion to protect
their retirement assets. As they do so, one question sometimes arises: Does the amount that you convert to a Roth
IRA count towards the Required Minimum Distribution? The short answer is no.

Let me illustrate with an example: Let’s say you want to convert $30,000 from your IRA to your Roth in a given year.
Let’s also say that in that same year, you have a Required Minimum Distribution of $20,000. Before you can do any
Roth Conversions, you are required to first take your $20,000 RMD. Once received, you can then proceed with your
Roth Conversion. Remember, however, that both the conversion and the RMD are taxable events, so be prepared to
pay taxes on an additional $50,000 of income. If this is too pricey, you can still do a Roth Conversion, but perhaps at
a lower amount.

What typically becomes of the $20,000 RMD, especially if you don’t need it for lifestyle purposes? In many cases,
these RMDs get deposited into some sort of taxable account like brokerage account or just a savings account, etc..
So, that $20,000 moves from an environment where it only gets taxed once, upon distribution, to an environment
where you will pay taxes yearly on any realized gains or dividends you experience. Doing this only creates a more
taxable imbalance in your financial situation and may lead to increasing your tax liability. So, instead of depositing this
into one of your taxable accounts, contemplate using it to pay taxes on your conversion, fund a Roth IRA (if possible),
or fund a life insurance program that has long-term care benefits.

We hope this information has helped clarify these questions and helped you with some new ideas as well to help your
financial situation!

Sincerely,

Barry Barnette
Bull Financial
404 Memorial Drive Ext.
Suite C
Greer, SC 29650
(864) 469-5991

Advisory Services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.
Securities offered through Registered Representatives of Cambridge Investment Research Advisors, Inc., a broker-
dealer, Member FINRA/SIPC to residents of South Carolina, North Carolina, Florida, Tennessee, Texas, and Illinois.
Cambridge and Bull Financial are not affiliated.
Cambridge does not offer tax or legal advice.
Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors
should be prepared to consider loss, including loss of principal.

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