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Roth IRA Conversions

Peak-Options: Roth IRA Conversions

A Roth IRA Conversion requires knowledge of rules, regulations and countless options. You don’t want to be going at it alone. Here at Peak-Options, Kirk Badii has been working with Roth IRA Conversions for years and can guide you through the entire process. Allow us to simplify the process for you.

What is a Roth IRA Conversion?

A Roth conversion is transfering funds from a traditional IRA or another qualified retirement plan into a Roth IRA. When a Roth conversion is executed, you are moving pre-tax or tax-deferred assets from one account into a Roth IRA. There are a couple of ways to do this. One entails the transfer of assets from an existing IRA directly into a Roth IRA via a financial institution. Alternatively, an IRA holder has the option to personally withdraw and allocate assets from their current plan into the Roth IRA, as long as this transfer occurs within a 60-day window following the distribution. It’s important to seek the help of a tax professional to oversee all conversions.

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Why Should I Consider a Rollover?

There are several reasons to consider a Roth IRA conversion:

Tax Diversification: Roth IRA withdrawals are not subject to income tax. Conversions can be used as a strategy to diversify your retirement income sources.

Future Tax Savings: Roth IRA can give you the option to pay taxes at your current rate if you are expecting to be in a higher tax bracket during retirement.

No Required Minimum Distributions (RMDs): RMDs are not required by Roth IRAs during your lifetime. This separates them from Traditional IRAs that require you to withdraw a certain amount at age 72.

Estate Planning: Qualified distributions allow heirs of a Roth IRA the benefit of not owing income tax.

When can I start utilizing a Roth IRA?

A Roth IRA can be utilized at any age, with the stipulation that you have earned income and meet the specific requirements of the financial institution where you opened your account

When Do Conversions to Roth IRA Make Sense?

Conversions to a Roth IRA make sense when you expect your future tax rate to be higher than your current rate or when you want to create a tax-free income source in retirement

How many Roth conversions are allowed per year?

There is not a limit on the number of Roth IRA conversions you can do in a year.

Are there income limits on Roth conversions?

There were no income limits on Roth conversions. However, tax laws can change, so it's advisable to check the current regulations or consult a financial advisor for the most up-to-date information.

Choose Peak-Options for Your Roth IRA Conversion Needs

Interested in more details? Let us know what we can help you with here. Kirk Badii would love to talk to you about Roth IRA conversions and whether or not it would be right fit for your financial goals.