Taxes are a central consideration, as is your current tax bracket and your expected future tax bracket.

If you expect your tax bracket to rise in the future, converting to a Roth can be advantageous.  The reason being that you will be required to pay taxes on the dollars you move from the IRA to a Roth and what you owe will be determined by your tax bracket at the time of the move.

If you are retired and no longer earn income from employment your tax rate may be lower than when you were working, and so the move to a Roth IRA may not prove to be as advantageous.

On the other hand, if you have many years left until retirement converting to a ROTH early when you are likely at the lower end of your earning capacity can allow you to take advantage of years of tax-free growth.  (withdrawals from a Roth are tax free)

If you have already started taking your required minimum distributions, you will need to be mindful that you cannot convert RMD accounts to a Roth.  You can convert any amount above your RMD.

The benefits of a conversation may be fewer once you are in retirement and in a lower tax bracket than you had been while employed.   One benefit that will not be lessened after retirement is the ability to make tax free distributions to heirs.


When considering a conversion, it is important to consider your current financial situation as well as your expected future tax rates, investment goals and retirement timeline.  There’s a lot to consider.  A financial advisor from Sara-Bay Financial can walk you through the decision process and help you make the most advantageous decision for you.







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