Mailbag: Bond Funds, Roth Conversions, Advanced FI Strategies, Solo 401k and Backdoor Roth

ChooseFI

Brad Barrett | Choose FI Media

Financialindependence, Investing, Firemovement, Passiveincome, Frugalliving, Personalfinancepodcast, Daveramsey, Careers, Business, Earlyretirement, Habits

4.8 • 5K Ratings

🗓️ 21 July 2025

⏱️ 63 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Brad and Rachael Camp tackle listener-submitted questions focusing on bonds, retirement strategies, pensions, and optimizing Roth IRA conversions. Rachael Camp, a Certified Financial Planner, sheds light on various financial independence (FI) strategies—discussing the impact of interest rate volatility on bond investments, the importance of tax planning during retirement, and navigating unexpected inheritances.

Timestamps and Key Topics

00:01:10 - Introduction to Bonds
00:03:15 - Bonds vs. Bond Funds
00:24:07 - Pension Strategies
00:27:29 - Roth IRA Conversions
00:45:11 - Handling Inheritance and Taxes

Key Insights

Understanding Bond Dynamics:
- Timestamp: 00:04:10: Understanding the inverse relationship between bond prices and interest rates is crucial.
- Timestamp: 00:16:30: Review your bond strategy annually to assess risks associated with interest rate changes.
Bond Funds vs Individual Bonds:
- Timestamp: 00:21:24: For long-term strategies, individual bonds and bond funds often perform similarly. If you consistently reinvest mature bonds, you effectively manage the same risk as a bond fund.
Pension Ramifications:
- Timestamp: 00:25:53: Use your pension wisely to enhance your tax strategy!
Roth IRA Conversion Strategy:
- Timestamp: 00:34:10: Maximize your savings with strategic Roth conversions, particularly before pension income starts.
Inheritance Implications:
- Timestamp: 00:46:21: Evaluate the impact of any inheritance on your overall tax strategy carefully.

Actionable Takeaways

Regularly assess your bond exposure and adjust according to market conditions.
Prioritize Roth conversions during income gaps in your retirement timeline to leverage low tax brackets.
Plan your inheritance withdrawals strategically over the 10-year required period to mitigate tax impacts.

Frequently Asked Questions

What is the difference between bond funds and individual bonds?
- Bond funds are collections of bonds that continue to reinvest, while individual bonds are purchased with a fixed interest rate and maturity. This influences cash flow needs and risk tolerance. Timestamp: 00:10:40
How do Roth conversions affect my tax bracket?
- Roth conversions can fill your tax bracket before pensions begin to reduce available space, maximizing tax efficiency of your retirement income. Timestamp: 00:34:10

Transcript

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0:00.0	Hello and welcome to Chusify.
0:01.8	Today on the show, we have another mailback episode with our good friend, Rachel Camp. She's the CFP, and this is now her ninth visit here to Chusify to do these mailback episodes with me. And they're always a blast because we really, we cover a wide range of topics. Rachel always picks great questions. And these come from you, the community. So we touch on a lot of things here. I'm going to just bomb through a couple of them.
0:02.2	Bond funds versus individual bonds. questions and these come from you, the community. So we touch on a lot of things here. I'm going to
0:21.3	just bomb through a couple of them. Bond funds versus individual bonds, Roth conversions in a
0:26.7	down market, advance five strategies and the interplay with pensions, social security calculations
0:32.3	and what gets included in income, solo 401K, backdoor Roth, RSUs, and Social Security, all of these things
0:38.3	in one episode. I think this is going to be a really useful one, and I was especially
0:43.2	interested in our conversation about bonds, because I think this is something that is
0:48.0	top of mind for a lot of people, and I know Rachel is getting this from many, many of her
0:52.8	clients in her CFP practice.
0:54.6	So I think you're really going to enjoy this episode.
0:57.5	And with that, welcome to choose up by.
1:06.9	Rachel, you're back for mailbag number nine.
1:09.7	This should be fun.
1:10.6	Yeah, I love it. Love to be here, Brad. I'm excited. Yeah, you are the best. I really appreciate you. You're doing this consistently. So you, as always, have picked the questions. Of all the hundreds of questions we get, we toss on this one Google sheet, and you pick out six or seven each time. And we're going to get started. So you have
1:29.3	told me that a lot of your clients are asking you about bonds. And that was top of mind for you when
1:37.0	you went through the question list. And one came in from Stephen. So this is a bit of a long one,
1:41.8	but I'm going to try to read it as much verbatim as I can.
1:44.8	So I have a question relating to bonds from this week's mailbag episode with Rachel Camp.
1:49.5	So this is a prior one. When discussing asset allocation as you approach retirement, you talked
1:54.1	about the importance of having cash and bonds to help deal with sequence of return risk at the
1:58.8	beginning. This all makes sense, but it brought up
	...

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