Home / Articles / Is a Roth IRA conversion right for you this year?

Is a Roth IRA conversion right for you this year?

August 5, 2014

Share:

If you have a traditional IRA, you might benefit from converting some or all of it to a Roth IRA. A conversion can allow you to turn tax-deferred future growth into tax-free growth. It also can provide estate planning advantages: Roth IRAs don’t require you to take distributions during your life, so you can let the entire balance grow tax-free over your lifetime for the benefit of your heirs.
There’s no income-based limit on who can convert to a Roth IRA. But the converted amount is taxable in the year of the conversion. Whether a conversion makes sense for you depends on factors such as:

• Your age,
• Whether the conversion would push you into a higher income tax bracket or trigger the 3.8% net investment income tax,
• Whether you can afford to pay the tax on the conversion,
• Your tax bracket now and expected tax bracket in retirement, and
• Whether you’ll need the IRA funds in retirement.

We can run the numbers and help you decide if a conversion is right for you this year.

© 2014

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

Guidance

Related Articles

Article

2 Min Read

Clark Schaefer Hackett Names Kyle Shumate as Chief Marketing Officer

Article

2 Min Read

How the Inflation Reduction Act Is Extending and Expanding Solar Energy Tax Incentives

Article

2 Min Read

Year-End Tax Planning: Act Now to Reduce Your 2022 Tax Bill

Article

2 Min Read

Is Your Business Tracking R&E Expenses in Preparation for New Section 174 Amortization Rules?

Article

2 Min Read

The Inflation Reduction Act Extends Energy Efficiency Building Incentives

Article

2 Min Read

Inflation Reduction Act Expands Valuable R&D Payroll Tax Credit

Get in Touch.

What service are you looking for? We'll match you with an experienced advisor, who will help you find an effective and sustainable solution.
  • Hidden
  • This field is for validation purposes and should be left unchanged.