For those who are retiring at their full retirement age (FRA) of 66 or 67 but may be waiting to collect until age 70, a Roth conversion
is an attractive way to help stretch retirement dollars by smoothing out tax rates.
Let's say our couple did a Roth conversion
in 2013, substantially increasing their 2013 income.
GOETZ is a member of Ed Slott's Elite IRA Advisor Group(SM), a group of the nation's top financial professionals committed to expert education on Roth conversion
planning, estate planning and leveraging current tax law in an effort to ensure their clients' retirement accounts are set up and maintained correctly.
However, come time to retire, you may be having the Roth conversion
The tax liability on such a distribution can sometimes lead a taxpayer to improperly conclude his or her best option is to recover the nontaxable portion ratably as distributions are received, without considering a Roth conversion
Accordingly, triggering the income in 2012 at this year's lower tax rates may make a Roth conversion
In the case of a Roth conversion
, you'll pay income taxes this year on converted amounts.
The current $250,000 income threshold established by the Obama administration might very well change in the future so, therefore, a client can do a partial Roth conversion
now, understand and absorb the immediate tax liability, and retain a portion of the account to potentially convert at a later date if the rules change again.
Then again, if you think that appreciation will start occurring sooner rather than later, you're within the income limit and you can forgo the tax deferral, you might consider a Roth conversion
com/tvr), which explains the differences between Roth and Traditional IRAs; a Roth Conversion
If you initiated a Roth conversion
earlier in 2011 and that Roth account has declined in value since then, you should consider a Roth reconversion," Luscombe added.
1, 2010, when the income limit on Roth conversions
is permanently eliminated, the only taxpayers eligible for a Roth conversion
are those whose modified adjusted gross income is $100,000 or less, whether they file "married/joint" or "single.