A Roth conversion is the process of moving assets from your traditional Individual Retirement Account (IRA) into a Roth IRA. Roth IRAs are unique because the investment growth is never subject to taxation – even when the assets are distributed from the account.
Roth conversions can avoid future Required Minimum Distributions (RMDs), enhance the value of your estate, and smooth your tax burden across several years.
At Marotta Wealth Management, we assess each of our “Comprehensive” level clients for tax planning opportunities. If they are good candidates for a Roth conversion, we develop a personalized Roth conversion plan and revisit it every year. Over a client’s lifetime, we believe this service can be worth hundreds of thousands of dollars or, in many cases for high net worth clients, millions of dollars.
We also provide the administrative support necessary to oversee the entire conversion process, including helping you or your tax preparer make sense of the reporting.
Q&A: Roth Conversion When Traditional IRA is 90% of Net Worth?
Because so much of your net worth is in traditional IRA, how quickly you expect to withdraw from your retirement account assets will heavily influence how quickly or slowly the math would advise that you convert.
Four Simple But Effective Conversion Target Calculations
Doing some conversion is usually much better than doing no conversion at all. We offer these four simple but effective strategies to calculate a good-enough conversion target for this year.