Broker Check

Roth Conversions

| September 15, 2020
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Dear valued client,

Although filled to the rim with disruptions and challenges, this year has created an opportunity for some, and we are always on the lookout to turn lemons into lemonade.

Some of you may have increased your savings due to the lack of spending.  Unfortunately, those same lockdowns may also mean you are in a lower tax bracket this year due to reductions in your income.

You may be able to convert part of your traditional IRA balances into Roth IRAs, which can significantly save you from tax liabilities in the long run.  Tax planning with your CPAs is important, and if your circumstances are appropriate, a Roth conversion may provide you with tangible benefits.  Keep in mind that even if a Roth conversion works for you on paper, it still might not be suitable for some.  That is because proceeds from Roth conversions cannot be withdrawn for five years without incurring penalties that would undo the benefits of the conversion.

Despite these limits, this year may be the right time for you to consider whether a Roth conversion can help your bottom line by increasing your long term net income.  I am happy to discuss with you whether your circumstances allow you to benefit from this opportunity, and I welcome your inquiries. 

Take good care, Anna

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