Year-End Tax Planning Spotlight: Roth Conversions
Article by: Jeff Chase
Vice President, Financial Planning – Wealth Manager
As mentioned in one of our previous newsletter articles, this is the time of year when our team is in full year-end tax planning mode!
One of the planning strategies that we commonly discuss and want to spotlight this month is Roth conversions. This involves taking pre-tax dollars that have accumulated in a retirement account and converting them into a Roth account. By doing so, you must pay tax on the money that gets converted now, but for some people, this can be a very impactful strategy for long-term planning.
Who might want to consider this? Some examples include those who think they will be in a higher tax bracket in the future, people who are trying to maximize the amount of money that will be left to their heirs someday, or those who are looking for tax diversification in retirement.
🎧 Resource: [Podcast]
Of course, this strategy is not right for everyone, and inevitably there are many factors that need to be considered, but if we think a Roth conversion is in your best interest, you can expect to have this conversation with us soon!
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