Question: “I am 53 years old and was forced to retire earlier than expected from my heavy equipment operator job due to small cell neuropathy in both my hands and feet. I have $700,000 in a large investment management company invested in high distribution paying Master Limited Partnerships (MLPs) like energy transfer and Marathon Petroleum. They pay $50,000 per year in distributions. I also have $70,000 in a Roth IRA and $250,000 in my employer’s 401(k) that I rolled over to my investment management company account. I am currently trying to apply for SSDI but it’s not guaranteed. Should I be slowly converting the $250,000 from my 401(k) to my Roth IRA ? If so, how much should I convert per year and what are the advantages of doing so? Should I hire a financial adviser to help me through this?”

Investing strategy

Though you’ve built a solid nest egg, being heavily concentrated in MLPs may expose you to unnecessary risk. “Diversifying your portfolio could help provide more stable income in retirement,” says certified financial planner Ryan Haiss at Flynn Zito Capital Management. This is something a good financial planner could help with.

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The $50,000 in distributions from the MLPs isn’t guaranteed or permanent, it’s based on how much cash the MLP generates, which can be risky since most MLPs are tied to fluctuating oil and gas prices. MLPs also tend to have higher interest rates, which can reduce profits, and holding mostly MLPs means your income is tied to one industry which is riskier than diversifying.

Roth conversions

While converting funds from a 401(k) to a Roth IRA can be a powerful tool, it’s not a one-size-fits-all move, says John Piershale, certified financial planner at John Piershale Wealth Management. “This is especially true if you’re facing early retirement, medical challenges or uncertain income,” says Piershale. When you convert pre-tax retirement money, you pay ordinary income tax on the amount you convert. “The upside is once in the Roth, your money can grow and eventually be withdrawn tax-free, provided you follow the rules. Uncle Sam gets paid up front, you get tax-free growth,” he says.

Roth conversions can be a smart part of retirement planning, particularly if you’re looking for tax diversification, no RMDs or potentially lower taxes long-term. “Every situation is unique and conversions are permanent. Converting large sums can mean a bigger tax bill than you expect, so it’s worth running the numbers or working with a pro. If you’re applying for disability, more taxable income might affect your eligibility, so tread carefully,” says Piershale. 

For his part, Ryan Bayonnet at Hyland Financial PLanning says converting pre-tax funds to a Roth IRA can be smart, but he recommends doing so from an IRA, not your 401(k). “That’s because 401(k)s allow for penalty-free distributions starting at age 55 if you separate from service, whereas IRAs require waiting until age 59.5. Keeping some funds in the 401(k) could provide flexibility in the near term if you need to access cash,” says Bayonnet.

As for how much to convert, a CFP can help you determine the right amount based on your income, tax bracket and goals. “I’d likely recommend converting just enough each year to stay within the 12% federal tax bracket. This allows you to take advantage of a relatively low tax rate now while setting up future tax-free growth in the Roth,” says Bayonnet. You can use this free tool from our partner SmartAsset to match you to financial advisers, as well as sites like CFP Board and NAPFA.

SSDI

Social Security Disability Insurance is funded through Social Security to benefit people who can’t work due to a medically proven disability. To qualify, you must have a qualifying disability that prevents you from working, be unable to perform substantial gainful activity, which in 2025 means you can’t earn more than about $1,550 per month, and you must have enough work credits accrued in the last 10 years, prior to becoming disabled. Since your condition could qualify as disabling and you likely have enough work credits, you’re probably a strong candidate for SSDI if you can prove that your condition prevents you from doing any work, not just your old job.

The need for a financial plan — and potentially a financial planner

Whether or not you decide to work with a financial adviser to guide you through this process, having a financial plan is essential in preparing for your future. “Social Security benefits, MLPs and Roth conversions need to be part of a comprehensive financial plan. You can’t consider any of them alone because each one affects the others,” says certified financial planner Robert Persichitte at Delagify.

At a minimum, Persichitte says your plan needs to consider the taxes that you’re paying now and the taxes you’re projected to pay in the future. “You need to consider how your income and expenses will change over time, especially after you begin taking required minimum distributions. Most asset managers charge high enough fees that they should be providing these services as part of your advisory fees. Consider hiring a professional who specializes in financial planning rather than sales or standalone asset management,” says Persichitte.

Specifically, an adviser with a strong tax background can help you put this together, says Bill Nugent, certified financial planner at Convey Wealth Management. “Look for a CFP who is also a CPA or IRS Enrolled Agent. This additional tax knowledge and licensing allows them to go deeper into the world of tax planning,” says Nugent.

For most people, especially those with complex income streams or health issues, Piershale says having a fee-only fiduciary planner in your corner is like having a copilot. “Someone to help you avoid turbulence and IRS surprises. Just make sure they’re working in your best interest and not selling you a product,” says Piershale. 

If your current firm isn’t helping with this kind of planning, it may be worth working with a fiduciary adviser who offers comprehensive and tax planning, says Haiss. “This can help ensure your income is structured efficiently and in line with your long-term goals,” says Haiss. Before selecting a pro to work with, Nugent says, “In the vetting process you should ask for specific stories and planning samples regarding Roth conversion analysis. Many advisers profess to help with tax planning but in reality they don’t do much actual work in this space.” You can use this free tool from our partner SmartAsset to match you to financial advisers, as well as sites like CFP Board and NAPFA.

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