A Roth conversion involves moving money from a traditional IRA or 401(k) into a Roth IRA. While this process comes with a tax bill on the converted amount, by paying taxes upfront, you’re essentially pre paying for tax-free withdrawals in retirement.*

What is a Roth IRA?

You can convert a portion of your traditional retirement savings each year, managing your tax liability strategically.* This can be advantageous during years when you find yourself in a lower tax bracket, or if you feel taxes could go up in the future.

What are the Benefits of Roth Conversions?

Roth conversions can also be advantageous for legacy planning. By converting funds to a Roth, you avoid the required minimum distributions (RMDs), allowing your money to continue growing tax-free for as long as you wish. This is a benefit to you and whoever inherits the money. It’s nice inheriting money, but it’s fantastic to inherit tax-free money.

In summary, Roth conversions could be a valuable tool for building a tax efficient retirement plan. The benefits of tax-free withdrawals,* flexible access to contributions, and strategic tax planning, could help you have a well-rounded retirement strategy.

*Taxes on conversions are paid at current tax rates in the year of the conversion, based on total income. At age 59 1/2 you can withdraw both contributions and earnings with no penalty, provided that your Roth IRA conversion has been open at least five tax years.

Enough About Money: This month’s restaurant recommendation is The Spott – for three main reasons – great steaks, great service, and a super cool “speakeasy” upstairs bar. It’s an NSB must-do.

This is an unpaid endorsement for The Spott. Anders & Anders Financial Group and The Spott are non-affiliated entities.

Securities offered through Madison Avenue Securities, LLC (MAS), member FINRA/SIPC. MAS and Anders & Anders Financial Group are not affiliated companies. Our firm does not offer tax or legal advice. Consult your tax or legal advisor regarding your situation. A Roth conversion is a taxable event that may not be right for your situation. Consult your tax advisor before making a Roth conversion.

ANDERS & ANDERS FINANCIAL GROUP
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315 Live Oak St. | NSB, FL 32168
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