The Pros of a Roth IRA Conversion

Apr 26, 2022

The theme this week on the Retirement Quick Tips Podcast is: Does It Matter When You Convert To a Roth IRA or 401k? 

Today, I’m talking about Why At Least Some Of Your Retirement Should Be In A Roth IRA….in other words, what are some of the biggest benefits of having a meaningful amount of your retirement assets inside of a Roth IRA account. 

Here are just a few of the biggest benefits of doing a Roth IRA conversion: 

1. Anticipate higher taxes, especially in retirement. Taxes right now are pretty low by historical norms. 
2. Estate tax rules significantly favor the Roth IRA assets. The SECURE Act passed in 2019 created a10-year rule for non-spouse beneficiaries to withdraw all funds from the original owner’s IRA. The act established a time period of 10 years for the “full” distribution of an inherited IRA for deaths occurring in 2020 or later. The 10 year rule still applies to the Roth IRA, but $0 dollars of that is taxable to your beneficiaries. This is a huge change, and significantly increases the amount of accelerated taxes your beneficiaries will pay on inherited IRA assets, that’s largely out of their control and could send them into much higher tax brackets especially if the IRA assets are significant. 
3. The best reason to convert assets to Roth - reduced RMDs (explain) 

Not sure if a Roth conversion is right for you? I’ll run the numbers for you to help you decide if a Roth conversion makes sense for you. Just email me your age, the $ amount you want to convert, and your expected income for 2022, and I will send you a personalized Roth conversion analysis and help you interpret the results. 

Just send me an email - [e-mail] - again with your age, the $ amount you want to convert to Roth, and your 2022 expected income. That’s [e-mail]

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance