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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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...
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....
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...
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....
Discover three effective strategies for using Roth IRAs and Roth 401(k)s in retirement to maximize tax-free income, manage withdrawals, and secure your financial future....
It might seem counterintuitive, but there are scenarios in which it would make sense to lock in lower marginal tax rates....
If you've been a good saver and face large required minimum distributions (RMDs), then you need to plan for how to head off or limit higher Medicare premiums....
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...
Consider the idea of not converting any, some, or all of your Traditional IRA to a Roth IRA and go against the conventional wisdom....
Is timing the market when you withdraw money from your retirement accounts or do Roth conversions an effective strategy to minimize tax and maximize returns for YMYW listener Robert? That’s toda...
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...
Roth conversions can be an effective strategy for creating tax-free income in retirement. But Roth conversions can also get complex, and if you’re not careful it’s easy to make mistakes th...
Here are some strategies for utilizing whole life or indexed universal life policies to convert your traditional IRA to a Roth with LTC protection....
Retirement savers can reap benefits in the conversion if they are able to pay a tax now....
The are smart ways and terribly taxing to get funds from an Inherited IRA to a Roth account. Keep reading to learn how to get more tax free income from your inheritance....
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...
The Roth 401(k) vs. traditional 401(k) decision can mean the difference between higher taxes now or in retirement. It's your choice....
How much do retirees really spend in retirement? Does the Social Security Primary Insurance Amount (PIA) continue to rise with inflation? Is all the talk about higher future tax brackets just fear-mon...
All offer great tax breaks as you save for retirement. In addition, there are 403(b), SEP and SIMPLE plans and more. But don't worry. It’s hard to go wrong....
If your company offers a Roth 401(k) you can convert your traditional 401(k) to pay lower taxes in retirement....
Photo credit: jb Many times it is among the best of ideas to establish a Roth IRA for your child. This way, your child can benefit from the long-term growth in the account and have a very good head st...
Should Mike in Virginia keep using his IRA money to pay the tax on his Roth conversions? How do you do a Roth conversion when you don’t have the money to pay the tax? That’s PeterLemonJell...
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...
Lean into a Roth IRA well before your “day one” of retirement....
Photo credit: diedoe I occasionally receive this question: Can I make a non-deductible IRA contribution, and then shortly after convert the IRA into a Roth IRA? My income is too high for me to make a ...
A couple compares the differences between a Traditional IRA and a Roth IRA. Selecting the right Individual Retirement Account (IRA) is a crucial step for your financial future. With various options av...