Should You Convert to a Roth IRA Before 2014?

10:57 pm Retirement Planning

ira e1346184593476 Should You Convert to a Roth IRA Before 2014?According to a recent Fidelity Investments report, Roth IRA conversions were up 12% in October over the same time last year.  Fidelity said the trend marks the growing awareness by investors about the benefits of converting from a traditional IRA to a Roth IRA.

So what are some of the benefits of a Roth IRA conversion?  Here are six:

  1. No income tax liability on the growth of the converted assets
  2. Reduction in required minimum distribution rate that kicks in at age 70 ½
  3. Opportunity to pay income tax on the conversion at a reduced rate
  4. Ability to take withdrawals without penalty as long as you are 59 ½ and meet the five-year and/or beneficiary Roth IRA rules
  5. Potential reduction in Social Security benefit taxation amounts
  6. Increase in potential future income tax planning opportunities

You should discuss the advantages and opportunities that a Roth IRA conversion offers with your retirement planning attorney.  Contact our Costa Mesa law firm for help.

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