Happy Birthday to the Roth IRA.

Yesterday was my birthday but it was also another important day in history. The birthday of the Roth IRA. Roth accounts were born 20 years ago and are one of the best tools in financial planning if used properly.  Some of the benefits are obvious but others are not. You may know that Roth money is contributed after tax and grows tax free forever. But did you know that Roth accounts don’t have required minimum distributions like their traditional counterparts do?


Another huge benefit is that when you take distributions they are not counted as earned income which means your tax bill is not impacted. This can be huge in retirement especially when considering working part time while drawing Social Security.


What if you have all your money in traditional accounts? Can you get it into Roth accounts without paying taxes and take advantage of these benefits? There’s a good chance you can with a technique called “Roth conversions.” Roth conversions are when you money from traditional IRA accounts to Roth IRAs leveraging your lower tax brackets in lower earning years. The power of this process can be mind boggling if done right. Not only to protect your money now from taxes and required minimum distributions but also in the future for money you may want to leave heirs.


If you want to learn how using Roth conversions as a retirement planning tool can benefit you, schedule a strategy session with us to chat about it. It’s free and may be the best 45 minutes you ever spent working on your retirement. Go to www.kisplanning.com/apply to get started. Have a great holiday and let me know if you have further questions. -Jason


https://www.financial-planning.com/news/roth-ira-rollover-for-retirement-planning-and-tax-savings