Video from Facebook live stream from the Facebook group, "Taxes in Retirement," from December 16, 2020. Discussion of everything you need to know about Roth conversions. To join Taxes in Retirement - #TaxPlanning #RetirementPlanning #RothConversion DISCLAIMER: This video is only helpful hints and education. It is not specific tax, legal or investment advice. Before considering acting on anything you see in this video, first consult with your tax, legal or investment advisor. While the information expressed in this video is believed to be accurate, neither Andy Panko, CFP®, RICP®, EA nor Tenon Financial LLC make any guarantees to its accuracy....(read more)
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On December 16, 2020, a Facebook Live event was held to provide information on what to know about Roth conversions. The event was aimed at individuals who are considering converting their traditional IRA or 401(k) to a Roth IRA. The first topic covered in the event is the difference between traditional and Roth IRAs. Traditional IRAs allow individuals to deduct their contributions from their taxable income, while Roth IRAs do not allow deductions. The money in traditional IRAs grows tax-deferred, which means individuals must pay taxes on it when they withdraw the funds. On the other hand, money in Roth IRAs grows tax-free, and individuals do not pay taxes when they withdraw their funds. The event also emphasized that individuals who consider Roth conversions should be aware of the tax implications. Converting to a Roth IRA requires the payment of taxes on the converted funds. The tax rate on the converted funds should be taken into account, as it can have an impact on one's tax bill for the year in which the conversion is made. Another essential thing to know about Roth conversions is that there are no age restrictions. Individuals of any age can convert their traditional IRA or 401(k) to a Roth IRA. However, individuals who are older than 70 ½ years old and subject to required minimum distributions (RMDs) should understand that they need to take their RMDs for the year before they convert the remaining balance to a Roth IRA. The event also provided an overview of the pros and cons of Roth conversions. One advantage of Roth conversions is that they provide tax-free income during retirement. Roth IRAs do not require minimum distributions, which means the individual can keep their money in the account for as long as they like. Another benefit is that Roth IRAs can provide an inheritance for one's heirs, as the funds can be passed down tax-free. The disadvantages of Roth conversions include the immediate payment of taxes on the converted funds, which can be a significant expense for some. Also, Roth IRAs have contribution limits that can limit one's ability to build significant retirement savings. Finally, the conversion can push an individual into a higher tax bracket, which can lead to higher taxes on their other income. In conclusion, the Facebook Live event on what to know about Roth conversions provided essential information for individuals considering this retirement investment option. Roth conversions can offer numerous benefits, including tax-free income and an inheritance for heirs. However, individuals must also recognize the associated tax implications and weigh these against the potential benefits they may gain. https://inflationprotection.org/decoding-roth-conversions-tips-to-know-facebook-live-december-16-2020/?feed_id=85191&_unique_id=642efdda2e2ef #Inflation #Retirement #GoldIRA #Wealth #Investing #401k #FinancialPlanning #ira #retirementplanning #ROTH401k #rothconversion #RothIRA #TaxPlanning #taxesinretirement #SpousalIRA #401k #FinancialPlanning #ira #retirementplanning #ROTH401k #rothconversion #RothIRA #TaxPlanning #taxesinretirement
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