Roth accounts are an excellent vehicle for tax diversification and planning your financial future.  However, there are some changes to these laws being discussed in Congress.  Today, Amy Walls of Thimbleberry Financial breaks down current Roth options, and what might change.

First, we look at the tax triangle – and the three “corners” of assets, based on tax status.  Next Amy explains the  5 ways to contribute to a Roth account:

• Direct contributions
• Employer sponsored Roth plans (401k, 403b, and 457 plans)
• Converting Pre-Tax money to a Roth IRA
• Converting After-Tax money to a Roth IRA (back door Roth)
• Converting After-tax 401k money to Roth 401k (Mega back-door Roth)

Amy explains which of these strategies are could to be protected, which could change, and which could be eliminated altogether. If these changes happen, what options will we have available?  Finally, Amy explains why she’s advising to hold off on Roth conversions at present.

For questions about  anything related to your financial future, reach Amy Walls and her team at Thimbleberry Financial at (503) 610-6510, or on the web at …(read more)

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Roth accounts have become increasingly popular in recent years, thanks to their tax advantages and flexibility. But what exactly does the future hold for these retirement savings vehicles?

Roth accounts, which include Roth IRAs and Roth 401(k)s, differ from traditional retirement accounts in that contributions are made with after-tax dollars, meaning that withdrawals are tax-free in retirement. In addition, there are no required minimum distributions for Roth IRAs, making them a popular choice for individuals who want more control over their retirement savings.

One of the key advantages of Roth accounts is the ability to withdraw contributions at any time without penalty, making them a useful tool for individuals who need to access their savings for emergencies or other unexpected expenses. This flexibility has made Roth accounts an attractive option for many savers, particularly younger individuals who may be concerned about locking up their savings in a traditional retirement account.

Looking ahead, the future of Roth accounts appears bright. With the growing focus on financial literacy and retirement planning, more individuals are becoming aware of the benefits of Roth accounts and incorporating them into their long-term savings strategy.

In addition, recent legislative changes have expanded the accessibility of Roth accounts. The passage of the SECURE Act in 2019 made it easier for employers to offer Roth 401(k) options to their employees, and the legislation also extended the age at which individuals must begin taking required minimum distributions from traditional retirement accounts.

Another factor contributing to the potential growth of Roth accounts is the increasing shift towards self-directed retirement savings. With traditional pension plans becoming less common, individuals are taking a more active role in managing their retirement savings, and Roth accounts provide a valuable tool for building tax-free retirement income.

However, it’s important to note that the future of Roth accounts could be influenced by changes in tax policy. As the government grapples with the long-term challenges of funding social security and other entitlement programs, there may be pressure to increase tax revenue, which could potentially impact the tax treatment of retirement accounts.

Despite these potential challenges, the benefits of Roth accounts make them a valuable option for retirement savers. The ability to generate tax-free income in retirement, along with the flexibility to access contributions at any time, makes Roth accounts a powerful tool for building long-term financial security.

In conclusion, the future of Roth accounts looks promising, as more individuals recognize the value of tax-free retirement savings and incorporate them into their financial planning. While there may be potential challenges on the horizon, the benefits of Roth accounts make them a valuable option for retirement savers seeking to build a secure financial future.