Roth IRA Conversions
Why a Roth conversion might make sense for you:
- Earnings may be withdrawn free from federal taxes under certain circumstances.
- The ability to withdraw Roth IRA assets tax-free can diversify how your retirement assets are taxed, allowing for more flexibility to manage taxable income in retirement.
- With a Roth IRA, unlike Traditional IRAs and employer retirement plans, there is no requirement to begin taking taxable required minimum distributions (RMD) at age 70½.
- With a Roth IRA you may potentially reduce or eliminate the taxes your beneficiaries will have to pay in the event of your death.
Other factors to consider
- Converting your retirement savings account to a Roth IRA may prove beneficial if:
- You expect to be in a higher tax bracket during retirement.
- You're planning to keep the money invested in the Roth IRA for at least five years.
- You can pay the conversion taxes from assets other than those being converted.
- Converting to a Roth IRA may not be beneficial if:
- You expect to be in a lower tax bracket during retirement.
- You expect to need the assets in the next five years.
To start the Roth IRA conversion process
- Contact your ICMA-RC Retirement Plans Specialist or call Investor Services at 1-800-669-7400.
Before making the decision to convert retirement assets to a Roth IRA you should consult with a qualified tax advisor.