Tax-Saving Potential of Converting to a Roth IRA

Many workers save for retirement by making annual contributions to an individual retirement account (IRA) or qualified retirement plan such as a 401(k). Traditional IRAs are generally funded with before tax dollars and fully taxable when withdrawn. Roth IRAs, on the other hand, are funded with after-tax dollars, and distributions taken after age 59-½ are income-tax-free as long as certain criteria are met.

Unlike traditional IRAs, owners of Roth IRAs do not have to take required minimum distributions (RMDs), which can afford greater control of your taxable income during retirement. There are income restrictions on who can contribute to a Roth IRA. However, converting traditional IRA funds to a Roth IRA allows you to take advantage of a Roth’s potential benefits regardless of income level. It is also possible to convert pre-tax funds in a 401(k) plan to a Roth IRA.

We welcome the opportunity to meet with you to determine if, when and how converting to a Roth IRA is best for your unique situation.