Schedule a complimentary consultation:

For more info on the services we provide visit our website:

Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor.
Insurance products are offered through the insurance business Strategic Estate Planning Services, Inc. (SEPS). SEPS is also an Investment Advisory practice that offers products and services through AE Wealth
Management, LLC (AEWM), a Registered Investment Adviser. AEWM does not offer insurance products. The insurance products offered by SEPS are not subject to Investment Advisor requirements. AEWM and SEPS are
not affiliated companies. Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime
income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier. This video is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. SEPS is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by SEPS.
Please remember that converting an employer plan account to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including (but not limited to) a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor
before making any decisions regarding your IRA. 1846944-6/23…(read more)

LEARN MORE ABOUT: IRA Accounts

TRANSFER IRA TO GOLD: Gold IRA Account

TRANSFER IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

Converting to a Roth IRA – Be sure you’re not missing the point!

When it comes to planning for retirement, individuals have a range of options to choose from to grow their nest egg. One popular choice is converting a traditional IRA (Individual retirement account) into a Roth IRA. While this conversion can provide numerous benefits, it’s crucial not to miss the point of why this conversion is advantageous and the potential consequences of not fully understanding the process.

Firstly, let’s understand what a Roth IRA is. A Roth IRA is a type of individual retirement account that offers tax-free withdrawals during retirement. Unlike a traditional IRA, contributions made to a Roth IRA are not tax-deductible. However, the earnings and withdrawals in retirement are exempt from federal income tax, provided certain requirements are met.

One of the primary reasons individuals choose to convert their traditional IRA to a Roth IRA is to take advantage of the tax benefits. By converting, individuals pay taxes on the converted amount upfront, allowing the funds to grow tax-free and make tax-free withdrawals in retirement. This can be particularly beneficial for individuals who anticipate being in a higher tax bracket during retirement than they currently are.

Additionally, there are no required minimum distributions (RMDs) for Roth IRAs during the original account holder’s lifetime. Traditional IRAs, on the other hand, require individuals to start taking distributions once they reach the age of 72. This feature of Roth IRAs allows for more control over retirement income planning and provides added flexibility.

However, it’s crucial to consider the potential tax consequences before converting to a Roth IRA. By converting, individuals must pay taxes on the pre-tax contributions and earnings of their traditional IRAs. The amount to be converted is added to the individual’s taxable income, which can potentially bump them up into a higher tax bracket and increase their overall tax liability for that year.

Therefore, it’s essential to carefully analyze your financial situation and tax implications before initiating a conversion. Consulting with a financial advisor or tax professional can provide valuable guidance in understanding how the conversion will impact your individual circumstances and if it aligns with your retirement goals.

Another aspect that individuals need to consider is the time horizon until retirement. Converting to a Roth IRA may not be beneficial for individuals planning to retire soon since they will have less time to make up for the tax hit taken during the conversion. Ideally, individuals who plan to leave the converted funds untouched for a more extended period can benefit significantly from the tax-free growth and withdrawals.

Furthermore, individuals are encouraged to consider their current and future income, as it plays a crucial role in determining the conversion’s financial impact. If an individual’s current income is significantly higher than their anticipated income during retirement, a conversion might not be the most advantageous decision. However, if the opposite is true, converting can provide significant long-term tax savings.

In conclusion, converting a traditional IRA into a Roth IRA offers numerous advantages, including tax-free growth and withdrawals, no RMD requirements, and increased control over retirement income planning. Nevertheless, it’s paramount to understand the potential tax consequences, evaluate your financial situation, and assess your future income expectations before deciding to convert. Taking the time to thoroughly analyze your circumstances and seek professional guidance will ensure that you are making the right decision for your retirement savings, staying on track to achieve your financial goals.