A Roth account is a type of individual retirement account (IRA) that is funded with after-tax dollars. This means that the money you contribute to a Roth account has already been taxed and you will not receive a tax deduction for your contributions. However, the money you contribute to a Roth account grows tax-free and you can withdraw your contributions and any earnings on them tax-free in retirement.
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I am deciding whether or not to convert. I will be working for at least 10 more years. By then my tax-deferred funds will be slightly over $2 million. I want to convert at least $250k over a 5 year ti...
We answer a question from a 44-year-old Pittsburgh bus driver earning over six figures annually who maxes out a Roth IRA, contributes 10.5% to a 457 plan, and is covered by a pension. He owns five ren...
Discover the opportunities and limits of modeling your Roth conversion opportunities and get 6 tips for doing better. The post Planning for Uncertainty: Why Roth Conversions Require Iteration, Not Per...
Today we're bringing back one of our most downloaded episodes:The Three Reasons for Roth Conversions. We released this back in May of 2023 and it’s already shot up to be one of the most listened...
Republican lawmakers and conservative think tanks are proposing a new type of tax-advantaged savings account. Think Roth IRAs, but not just for retirement....
The Roth conversion is a popular year-end tax maneuver for DIY retirement planners. It works just as well at the start of the year, but more people are interested in December. The move involves transf...
I'm 67, and will have to start taking out RMDs from my IRA account at 73. This will give me a big tax hit at that time and subsequently. I was thinking I could pull out $50K/year from the IRA for the ...
You have heard your colleagues talk about this “Mega Back Door Roth” thing? Or perhaps you read about it here on FAANG FIRE and thought it was some exotic, complicated, advanced strategy. ...
Answering reader questions about the Mega Backdoor Roth, Roth conversions, solo 401(k)s, individual IRAs, and what to do with an inherited IRA. We also talk about whether the Robinhood 3% match is wor...
What do you do with the pennies your money earns between the contribution and conversion to a Backdoor Roth IRA? Not much. The post Pennies and the Backdoor Roth IRA appeared first on The White Coat I...
Joe Anderson, CFP® and Big Al Clopine, CPA spitball on paying the tax on your Roth conversions on Your Money, Your Wealth® podcast number 507. If you take the money out of your retirement acco...
Today I have a guest post from personal finance enthusiast Dan Griffin. While Dan is not a practicing financial planner, he passed the CFP exam in 2010 and holds an Executive Certificate in Personal F...
Article says payoff takes too long. I'm not good with all the math, but the explanation given seems to make sense. Especially considering we never know what the tax rates will be on the future. I'm 60...
When picking which type of 401(k) or IRA is right for you, consider whether you want to save a little on your taxes now — or save a lot more on them later....
What’s a safe withdrawal rate for Wine Guy and Wine Gal in Sonoma California to have 35 years of “guaranteed” retirement spending? How aggressively should they convert their retireme...
Rob and his wife in North Carolina are 51 and 44 and would like to retire in the next 3-5 years. Are they on track, and what should they consider as far as Roth conversions are concerned once the tax ...
Roth conversions are almost a buzzword today, with many people jumping into them like they’re a guaranteed fix for tax worries—much like rushing into surgery hoping it will solve all your ...
Ever since I started saving for retirement in 1999, I’ve been a proponent of tax-deferred retirement vehicles like the 401(k) and skeptical of tax-now vehicles like the Roth IRA. Working in bank...
Prepaying income tax on a retirement account might be a good idea. Or it could be a really bad idea. Read this before pulling the trigger....
Can Ted and Georgette convert $1.6M in an inherited trust to Roth without distributing it? Should the trust own their home so they can use the home equity? Melissa was added as joint owner on her pare...
Think you might want to open a Roth IRA? Roth IRAs offer tax-free growth of your investments and no RMDs, but income limits are low and you have to wait to withdraw earnings....
When should Jack and Swan in Florida pay off their home, retire, and convert their savings to Roth for lifetime tax-free investment growth? Jennifer in Colorado wonders whether she should take taxes i...
Roth IRAs offer great tax-free income benefits, but to make the most of them in retirement, here are seven things you need to know: Contribution Limits: In 2024, you can contribute up to $7,000 annual...
Two proposed bills aim to open new doors to caregivers for contributing to Roth IRAs and making catch-up retirement contributions....
The short answer is: Not at all. Roth conversions can be great tax-saving strategies … for the right people. Are you a good candidate?...
Converting a tax-deferred account to a Roth can be a good strategy for lowering future taxes, but moving all of your money at once is typically not recommended....
I have an outstanding collection of resources on a variety of topics this month. We’ll explore financial planning concepts including Roth IRA conversions, building bond ladders, and performing 5...
If you’re concerned about possible tax policy changes after the next president takes office, you might want to consider a Roth conversion now....
The first Secure Act was a "game-changer for IRAs and Roth IRAs," according to a retirement expert. Here's the compelling case for paying taxes sooner....
Things to consider with an inherited 401(k) plan - such as, you can convert the plan to a Roth IRA, enjoying tax-free withdrawals afterward. The post Converting an Inherited 401(k) to Roth appeared fi...
What are the benefits of Roth conversions in retirement planning? James addresses questions about when Roth conversions become worthwhile. This episode explores key factors: Changes in tax bracket Spo...
Hawkeye and Elle are age 61 and in the 32% tax bracket. How should they get money into their Roth accounts for tax-free retirement income? Clark and Ellen are 69 and 68, expenses will pretty much be c...
Erik in MN is divorced, and the OC Birdman of South OC is getting divorced. Should Erik contribute to pre-tax retirement accounts or Roth? How should the Birdman and his soon-be-ex time the sale of th...
When you convert a traditional IRA to a Roth IRA matters if you want to limit how much you pay in taxes....
Should David in Ohio use 457 funds to do an in-plan Roth conversion in his 403(b) plan, and should he hire a financial advisor? Chris in DC needs a retirement and Roth conversion spitball analysis, an...
Gary is a 73-year-old with $8 million in savings. Despite having substantial assets, he’s concerned about missed opportunities for Roth conversions as he faces significant required minimum distr...
Listener Nael opens up a discussion about Roth conversions. There are benefits to doing Roth conversions, but can you do too many? Are there any downsides to Roth conversions? Reaping the tax benefits...
Healthcare subsidies are like a tax break and should always be optimized, right? That seems like an easy question that should have a straightforward answer. But the correct answer is, “It depend...
Listener Drew asks about a tax strategy for juggling capital gains and Roth conversions. While it can be a complicated question – especially when large accounts are involved – James provid...
A listener says, “Eventually, one spouse will pass before the other, which will often catapult the survivor into a significantly higher tax bracket. Shouldn’t a Roth strategy take this int...
Sammy, a 51-year-old retiree, is seeking advice on how much she should convert from her traditional IRA to a Roth IRA each year to avoid jumping tax brackets and minimize the taxation of her social se...
James explores the nuanced aspects of Roth IRAs, shedding light on intricacies that can confound even experienced investors. Through a listener question from Manfred, a retiree contemplating a $50,000...
The 2025 rule changes for Roth and traditional IRAs could mean more money for your retirement. But you have to pay attention to reap the rewards....
How much should you save in pre-tax accounts vs. post-tax accounts? Joe Anderson, CFP® and Big Al Clopine, CPA spitball on the "age plus 20" rule for retirement savings, Roth 401(k) contributions ...
Learn to make smarter financial decisions with math-driven strategies. James Lange shows how Roth IRA conversions and tax planning can maximize wealth and reduce taxes....
Today on Your Money, Your Wealth® podcast 495, Joe Anderson, CFP® and Big Al Clopine CPA spitball on three different listeners’ strategies for paying the tax on a Roth conversion now, to...
I was sitting around the campfire last weekend, enjoying the warmth of the flames and the comforting crackle of burning wood. My cousin, a financial advisor brimming with enthusiasm, leaned over and b...
So many retirement questions have no right answers. They’re simply judgment calls. In this episode, we’ll explore whether it makes sense to switch to a Roth 401K. Don’t listen to fin...
What is an exchange fund and is it a good thing if you have a lot of capital gains like Bryan in New York? That's today on Your Money, Your Wealth® podcast 492 with Joe Anderson, CFP® and Big ...
These retirement savings accounts, which are often pitched to young investors, can be a good option for older and retired workers....