Please call me at 475-619-2240 to understand if this is something that you should consider.
Roth IRAs may be a good idea for overall retirement planning.
- The growth inside a Roth IRA accumulates income tax free if the account is held for 5 years and the earnings are not taken from the account before age 59.5. Earnings withdrawn prior to the end of the 5 year aging period and prior to age 59.5 may be subject to a 10% early withdrawal penalty. However, there are exceptions that allow for withdrawals without the 10% federal tax penalty:
- You pass away
- You become disabled
- You make a qualified first-time home purchase
- There are no required minimum distributions like a Traditional IRA, so any conversions made before 70.5 reduce the amount of future mandatory distributions from Traditional IRA’s.
- Assets may pass to heirs tax free versus Traditional IRA assets that generally pass to heirs in a taxable fashion. Additionally, distributions must start upon inheritance.
Conversions
- Anyone can convert Traditional IRA assets to a Roth IRA.
- There are no income limitations like contributions to a Roth IRA.
- The conversion amount will be taxable at your income tax rate for the year of the conversion.
- Deciding whether to convert to a Roth IRA hinges in large part on considerations such as your tax rate now versus later.
- Under the new tax laws, the conversion will be permanent—you can't revert the money back to a traditional IRA.
**It's best to talk with a tax advisor to understand the tax ramifications before you make your decision.”
All investing is subject to risk, including the possible loss of the money invested.
Jordan Kerner
Financial Advisor, Waddell & Reed, Inc.
Office: 475-619-2240 | Cell: 917-301-7274 | Fax: 203-557-6262
www.jordankerner.wrfa.com | jkerner@wradvisors.com
495 Post Rd E Ste 209| Westport, CT 06880