If you are interested in strategies that may help minimize taxes in retirement, a Roth IRA could be worth considering.
While income limits may restrict you from making direct annual Roth IRA contributions, a Roth IRA conversion allows you to move part or all of your traditional retirement savings into a Roth IRA.
Here are key points to keep in mind:
- You will pay income tax on the taxable amount converted in the year of the conversion.
- In exchange, a Roth IRA offers the potential for tax-free growth and tax-free qualified withdrawals in the future.
- To maximize the value of a conversion, it is generally best to use funds outside of the IRA to pay any taxes owed.
Take a look at these resources, shared with us through our partnership with Sheri Bouchie and Morgan Stanley:
You may also learn more about these strategies by visiting Sheri’s website: https://advisor.morganstanley.com/sheri.bouchie.
If you would like to discuss whether a Roth IRA conversion may be appropriate for your situation, please contact your tax professional at our office.
Best regards,
Kenneth Freed & Company, PC