“To Roth or not to Roth? That is the question!”
RJ Kelly, AEP, CAP, CEPA, ChFC, CLU, MSFS, RICP, WMCP
Helping clients Reduce, Offset, Defer & Eliminate (RODE) unnecessary taxes | Leave more money in your pocket - don’t eRODE your gains | Author | Keynote Speaker
For years, financial and tax advisors have lectured about the wonderfulness of Roth IRAs and why you should convert traditional IRAs into Roth accounts. But, of course, you didn’t get around to it. In hindsight, maybe that was a good thing.
For many, the financial fallout from the COVID-19 crisis creates a once-in-a-lifetime opportunity to do Roth conversions at an affordable tax cost and also gain insurance against future tax rate increases.
Roth IRAs Have Two Big Tax Advantages
Let’s quickly review them.
Tax-Free Withdrawals
Unlike withdrawals from a traditional IRA, qualified Roth IRA withdrawals are federal-income-tax-free and usually state-income-tax-free, too.
What is a qualified withdrawal? In general, the tax-free qualified withdrawal is one taken after you meet both of the following requirements:
- You had at least one Roth IRA open for over five years.
- You reached age 59?, became disabled, or died.
To meet the five-year requirement, start the .... Continue Reading On Our Website