Is a Roth IRA conversion right for you this year?

July 29, 2014

If you have a traditional IRA, you might benefit from converting some or all of it to a Roth IRA. A Roth IRA conversion can allow you to turn tax-deferred future growth into tax-free growth. It also can provide estate planning advantages:Roth IRAs don’t require you to take distributions during your life, so you can let the entire balance grow tax-free over your lifetime for the benefit of your heirs.


There’s no income-based limit on who can convert to a Roth IRA. But the converted amount is taxable in the year of the conversion. Whether a conversion makes sense for you depends on f actors such as:

Your age,
Whether the conversion would push you into a higher income tax bracket or trigger the 3.8% net investment income tax,
Whether you can afford to pay the tax on the conversion,
Your tax bracket now and expected tax bracket in retirement, and
Whether you’ll need the IRA funds in retirement.
[styled_box title=”Styled box Title” type=”box” class=”sb_green”]Need help? Contact us. We can run the numbers and help you decide if a conversion is right for you this year.[/styled_box]


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