Ep 4: What is a Roth Conversion?
Investing PlanningOn This Episode
Roth conversions are becoming more and more popular as a retirement planning tool, but how much do you know about them? Today we’ll try to give you all the key information about Roth conversions so you can start determining if it’s a strategy that might work for you.
Takeaways
When the SECURE Act was signed at the end of 2019, it led to investors and advisors making adjustments to retirement planning.
One of the strategies that more people are considering is Roth conversions. Having the ability to move money from traditional retirement accounts to a Roth has a number of benefits but it’s not always for everyone.
On this episode of the Saving with Silverman podcast, Mark will help you understand everything you need to know about Roth conversions. We’ll start by explaining how they work and how it’s different than your traditional retirement account like a 401k. The main advantage we’ll explain is the tax benefit you might get in the long run.
That might be particularly true on the heels of a $2 trillion stimulus bill. How will tax rates change over the next 10-15 years? We’re in a historically-low period for taxes so many people expect those rates can only go up. Would you rather pay taxes now or wait and pay them when you take money out of your accounts in retirement?
Mark will also talk about the types of people that might benefit from this planning tool but also those that might not need to consider this option. Like everything else, there’s not one blanket answer for everyone so set up a meeting with us or your financial advisor and determine if a Roth conversion is something you need to do.
It’s time to get this episode started. Use the timestamps below to skip around to specific topics.
What we try to do is make sure you’re not paying taxes on money that you don’t need so one way to do it is through Roth conversion. It’s a great planning tool. -Mark Silverman, CFP®
The Layout
Let’s get rolling with the first episode and you can use the timestamps below to skip around to specific topics.
0:55 – What is a Roth conversion and why is it worth considering?
3:10 – Why might he Roth conversion be especially helpful for people with high incomes?
3:36 – Are there any common mistakes that you see people make with this?
4:10 – Who might benefit from this strategy?
5:20 – What about someone that shouldn’t do a conversion?
6:10 - What else will you discuss with clients alongside Roth conversions?
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