Are you considering a Roth Conversion? If so, you may have heard how it can help give you more control over your taxable income in retirement.
What exactly is a Roth Conversion?
A Roth Conversion involves transferring retirement funds from a traditional-type IRA or 401(k) into a Roth account. You would then pay taxes on this money now – rather than in your retirement.
Roth IRA’s are funded with after-tax dollars, and qualified withdrawals are tax free!
Why should you consider a Roth Conversion?
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- Roth IRAs aren’t subject to Required Minimum Distributions (RMDs)
- You believe your tax bracket will be higher in retirement
- You want to maximize your estate for your heirs
- Your accounts aren’t diversified by tax treatment
- You have irregular income streams and lower than usual income this year
It is important to understand that there are situations in which a Roth Conversion would not benefit you. It is always important to consult your advisor to discuss your options.
To learn more about a Roth Conversion, please visit: https://www.schwab.com/learn/story/why-consider-roth-ira-conversion-and-how-to-do-it