At retirement or when changing jobs, should you leave your money where it is, take the money and run, transfer it into another plan, or roll your money over into an IRA (individual retirement account)? Whatever choice you make has implications that will affect your retirement portfolio. We can help plan and execute the ideal option for you, allowing your money to potentially grow tax-deferred while providing you with more customizable investments.
Wealth Strategies
Summit Wealth Strategies
Roth Conversions & Alternatives
Knowing the pros and cons of converting a traditional IRA or 401(k) to a Roth IRA is important. Converting an account subject to income taxes to a tax-free Roth IRA can help provide tax-free growth potential and tax-free withdrawals in retirement.
However, it’s important to make sure a Roth conversion is right for you because these cannot be undone. Many retirees convert their traditional retirement accounts, the ones that were tax-deferred and therefore subject to ordinary income taxes during the tax year conversions are done, only to discover they would have been better off if they hadn’t converted their Roth.
At Summit Wealth Strategies™, our team helps you navigate your options to make sure a Roth conversion is right for you. Please remember that converting an employer plan account to a Roth IRA is a taxable event and is subject to strict IRS rules. Increased taxable income from the Roth IRA conversion may have several consequences, including increasing your Medicare premiums, so they must be undertaken carefully and with the right planning and timing. Be sure to consult with a qualified tax advisor before making any decisions regarding your taxable accounts like IRAs, 401(k)s, and similar taxable qualified accounts.
The Retirement Summit Podcast
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