Four Times You Should Consider a Roth Conversion
Proper Timing Can Help You Maximize the Benefits of Converting Your Traditional IRA
A traditional IRA is a fantastic retirement savings tool because you can minimize your current tax burden and pay taxes on your contributions later. There are some instances, though, when you may want to take care of what you owe the government now so that you can avoid subsequent taxes down the road. To accomplish this goal, you’ll want to convert some of your traditional IRA balance to a Roth as Roth IRA distributions in the future including all the gains will be income tax-free.
When might a Roth conversion make sense? Although you should always consider your unique financial planning needs, there are four scenarios in which it makes sense to consider a Roth conversion.