Converting to a Roth IRA Offers Tax-Free Growth and Withdrawals in Retirement
One major benefit of converting a Traditional IRA to a Roth IRA is future tax savings. After you pay taxes on the converted amount, your Roth IRA grows tax-free. In retirement, qualified withdrawals remain tax-free, providing predictable income with no surprises during tax season.
Roth IRAs Have No Required Minimum Distributions at Age 73
Among the pros and cons of converting a Traditional IRA to a Roth IRA is, traditional IRAs require you to start taking minimum distributions at age 73. A Roth IRA lets you avoid those forced withdrawals. This flexibility gives you more control over your retirement timeline and estate planning options.
You May Face a Significant Tax Bill in the Year You Convert
One major downside to converting is the immediate tax hit. The IRS considers the conversion taxable income, which could bump you into a higher tax bracket. If you’re not prepared, this move could do more harm than good—especially if you’re close to retirement.
Timing Your Conversion Can Make a Big Financial Difference
The best time to convert a Traditional IRA to a Roth IRA often comes during lower-income years or market downturns. Strategic timing reduces your tax burden and maximizes long-term gains. Consult a professional to analyze your specific financial situation.
Get Expert Guidance from Day Insurance Agency Before Making the Switch
At Day Insurance Agency, we help you weigh the benefits and risks of converting a Traditional IRA to a Roth IRA. We look at your income, tax bracket, and long-term goals to see if a conversion makes financial sense. Our guidance helps you avoid costly mistakes and plan for a more secure future.
Not sure if a Roth conversion fits your plan? Call Day Insurance Agency at (724) 228-3448 in Washington, PA or (724) 356-7700 in Hickory, PA. Let’s talk through the pros and cons of converting a Traditional IRA to a Roth IRA.