Roth Conversions: When Paying Taxes Now Could Save You Later
For many investors, retirement planning is not just about how much money you save — it is also about how and when your money gets taxed. One strategy that has become increasingly popular is the Roth conversion.
A Roth conversion allows you to move money from a traditional pre-tax retirement account into a Roth account. In exchange, you pay taxes on the amount converted today, but future qualified growth and withdrawals can potentially be tax-free.
The big question is:
Does a Roth conversion make sense for you?
The picture shows a simple framework that can help guide the conversation.
Many retirees and pre-retirees could unknowingly pay more taxes over their lifetime than necessary.
A well-planned Roth conversion strategy may help reduce future taxes, minimize RMDs, and create more tax-efficient retirement income.
The challenge is knowing when — and how much — to convert.
Schedule a complimentary Roth Conversion Analysis to see whether this strategy could make sense for your retirement plan.