Benefits of Roth Conversions
A valuable strategy we frequently review with clients is Roth Conversions. For many people, their Traditional 401(k) and Traditional IRA hold a major piece of their retirement assets. These accounts grow tax free but normal distributions are considered income and taxed accordingly in retirement. We sometimes refer to these distributions as a “Tax Alarm” that will hit most everyone at some point in retirement. However, with proper planning, we may find ways to reduce or virtually eliminate these tax issues.
https://www.thrivent.com/insights/retirement-planning/pros-and-cons-roth-ira-conversions
If you have not had this discussion with your advisor, you are potentially missing out on $10,000s or even $100,000s of dollars! This analysis is standard practice for our clients and something that consistently adds value. But it isn’t a strategy that every household is ready for. There is foundational work that needs to be tackled first. If you would like to discuss specifics for your financial situation, please reach out to me directly. I would love to have the discussion!
Thrivent and its financial advisors and professionals do not provide legal, accounting, or tax advice. Consult your attorney or tax professional. See thrivent.com/social for important disclosures. Roth IRA contributions are not tax-deductible, but withdrawals of contributions and earnings are tax-free, if you follow the rules. To withdraw earnings without penalties, you must first have the account for five years and be age 59½.
