A Roth IRA conversion moves your money from a traditional 401k or IRA account into a Roth IRA account. When you do this, you will need to pay taxes on the money you withdraw from your pre-tax accounts in order to “roll over” into a Roth. However, once the money is secured into a Roth account that money will grow tax-free for the rest of your life.
Now, there are ways to decrease the amount of tax you need to pay when you convert to a Roth. If you want to preserve your hard-earned money and make sure it doesn’t unnecessarily end up in the hands of the government you’ll want to employ some specific and comprehensive tax strategies.
The experienced team at Mid Atlantic Financial pioneered tax strategies to help you preserve, and in the long run grow, your wealth. Your money is well-earned and we know you want to retain as much as possible to ensure a lucrative future for not only you, but your heirs and loved ones. You want to work with the best, and that means you want to work with the team at Mid Atlantic Financial.
If you think a Roth IRA conversion would be a good fit for you and your family, here are the steps you’ll want to take:
Open a Roth IRA: The process to achieve this is relatively straightforward. We can walk you through this important first step.
Transfer Existing IRA Assets to the Roth IRA: Next, you’ll want to initiate a Roth IRA conversion with your traditional IRA or QRP provider. Remember that, if you choose to accept the funds with a check, you have 60 days to move the money into your Roth IRA account. You can also have the funds moved via a trustee to trustee transfer, and this is often easier since the move should theoretically be taken care of on your behalf. A Roth Right financial professional can go over this step in much more detail to thoroughly explain the process.
Pay Income Taxes On the Conversion: The major downside of a Roth conversion is that you will be paying taxes on the amount converted in the current year, and depending on your income tax bracket and the amount you’re converting, the tax bite could be substantial. It is important to fully understand your options: Using a Roth Right conversion strategy will lessen your tax burden to the tune of up to a 40% savings on the tax payment.
This is a very brief and high-level overview of the process. There’s much more to learn, and you’re in the right hands with Roth Right. Contact us today, so we can discuss your specific financial situation and get you the tax savings you deserve on your accumulated retirement savings.