Tax Mitigation
Roth Conversion
Pay tax now for decades of tax-free growth.
Converting pre-tax retirement funds to a Roth account means paying tax today so future growth and withdrawals can be tax-free.
How it works
You move funds from a traditional IRA or 401(k) into a Roth, paying ordinary income tax on the converted amount now. In exchange, qualified withdrawals, including all future growth, are tax-free, with no required minimum distributions.
Benefits & considerations
Potential benefits
- Tax-free growth and qualified withdrawals
- No required minimum distributions (RMDs)
- Hedge against higher future tax rates
- Tax-efficient wealth to pass to heirs
Considerations
- Conversion is taxable in the year you convert
- Timing matters, lower-income years help
- Best when you will not need the funds near-term
Who it is for
Savers who expect higher future taxes or want tax-free assets for heirs.
Explore Roth Conversion for your situation
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