FAQ

FAQ

Please review the Frequently Asked Questions Below

A Roth IRA is one of the most powerful wealth building and estate planning tolls that the tax code allows.

  • Tax-free growth: Your contributions and investment earnings grow tax-free in a Roth IRA. This means that you can compound your earnings over time without having to pay taxes on them.
  • Tax-free withdrawals: You can withdraw your contributions and earnings tax-free from a Roth IRA after age 59½ and if you have had the account for at least five years.
  • No required minimum distributions: Unlike traditional IRAs, Roth IRAs do not have required minimum distributions (RMDs). This means that you can leave your money in your Roth IRA for as long as you want and never have to take any withdrawals.
  • Flexibility: You can withdraw your contributions from a Roth IRA at any time without paying taxes or penalties. This can be helpful if you need to access your money for an unexpected expense.
  • Tax-free inheritance: If you pass away, your beneficiaries can withdraw your Roth IRA contributions and earnings tax-free. 

Anyone is eligible to convert to a Roth IRA, regardless of their income or tax filing status. This is because there are no age or income limits on Roth IRA conversions.  Anyone that has an IRA, 401k, 403B or other retirement account, that has access to their funds, can convert to a Roth.  There are also no maximums or minimums that can be converted.

  • Lower tax rates: Tax rates are currently relatively low, historically speaking. If you think that tax rates will be higher in the future, converting to a Roth IRA now can lock in your current tax rate.
  • Tax diversification: If most of your retirement savings are in tax-deferred accounts, such as a traditional IRA or 401(k), converting to a Roth IRA can help you diversify your tax exposure. This can be beneficial if you are concerned about future tax increases.
  • Flexibility: Roth IRAs offer more flexibility than traditional IRAs. For example, there are no required minimum distributions (RMDs) from Roth IRAs. This means that you can leave your money in your Roth IRA for as long as you want and never have to take any withdrawals.
  • Market downturn: The stock market has been down in recent months, which means that your traditional IRA investments may have lost value. If you convert your traditional IRA to a Roth IRA now, you will owe taxes on the amount you convert, but it will be based on the lower value of your investments.

Each individual’s financial situation is unique, and many factors must be considered when making such an important decision.  The first step to finding out if a Roth Conversion is right for you, is to fill out a Client Intake Form.  The intake form asks for general account balances, expenses, and tax information.  This gives your Roth Right specialist a glimpse into your financial status and allows them to guide you through this process.  click here to fill out an intake form.