The 5 Effects of Roth Conversions

Retire Ready with Kyle Hammerschmidt

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A Roth conversion is a process of moving funds from a traditional Individual Retirement Account (IRA) or a qualified retirement plan (like a 401k) to a Roth IRA. This conversion means that the account holder will owe income taxes on the converted amount, but once the conversion is complete, all future earnings and withdrawals from the Roth IRA will be tax-free. This can be a useful strategy for people who believe they may be in a higher tax bracket in the future or want to have tax-free retirement income. We discuss the 5 effects of Roth conversions and how they can play into a tax-efficient retirement plan.

1. The difference between "taxed now" and "taxed later"
2. Using taxable dollars to buy more Roth dollars
3. How Roth conversions can possibly lower RMDs
4. Setting up fewer taxable dollars on your balance sheet
5. Integrating your retirement plan with your tax planning – comprehensive retirement planning

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Disclosure: You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. This podcast is intended for educational purposes only. Nothing in this podcast constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns. Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost. MOKAN Wealth Management is a registered investment adviser with the SEC. Registration of an investment adviser does not imply a certain level of skill or training.