Is a Roth IRA Conversion Right for You?


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Randy Locklear Gulf FinancialBy Randal Locklier, President, Gulf Financial

It’s no secret that it’s a good time for Roth IRA conversions. We are doing a lot of them. Current Trump era personal income tax levels are some of the lowest in history. It’s also no secret that taxes could increase significantly in the future. Does it make sense to pay income taxes on Qualified assets (IRA) now while they are low? For a lot of folks, that answer will be yes. Especially if you are already in retirement and at a relatively low earned income. One way to see if a conversion is right for you is to run a mock tax return. Our tax team can work with you to determine the taxes owed ahead of time. Isn’t that a smart move? Being tax efficient will increase your income and improve the longevity of your portfolio. TAX SMART. That’s the Gulf Financial way.

Keep in mind the following KEY TAKEAWAYS

• You can convert all or part of the money in a traditional IRA into a Roth IRA.
• Even if your income exceeds the limits for making contributions to a Roth IRA, you can still do a Roth conversion, sometimes called a “backdoor Roth IRA.”
• You will owe taxes on the money you convert, but you’ll be able to take tax-free withdrawals from the Roth IRA in the future.
• Be aware that withdrawing converted funds within five years of the conversion will trigger a 10% penalty.
• Roth IRA conversions may not make as much sense for individuals nearing retirement; for that group it may be more advantageous to simply pay taxes over time via traditional IRA withdrawals. Open and fund a Roth if you are still working.

Questions? Visit or call me at 833-403-4041

Investments involve risk unless otherwise stated. Consult with a licensed Investment or Tax Advisor and read the prospectus prior to making any investment. This article is designed to provide accurate and authoritative information on the subject matter covered.