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In a nutshell, a ROTH Conversion is an IRS-approved process whereby you move assets from a tax-deferred Traditional IRA account to a separate, tax-free ROTH IRA account.

The IRS still requires that taxes be paid during the conversion process, but once the assets are deposited in the ROTH account, they grow tax-free, and your qualified withdrawals can be tax-free as well. That's why ROTH Conversion has become such a popular topic in recent years...

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Top Reasons For Converting

1. Lower taxes now vs. higher later

2. Create a tax-free legacy for your heirs

3. Eliminate/reduce RMDs

Let's review a few questions to see if ROTH Conversion makes sense for you...

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Do you have assets in a Traditional IRA?* This field is required.

YESNO

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Misconceptions on Conversion

The IRS wants the taxes they've allowed you to defer in your IRA year after year, so conversion isn't as simple as moving assets from one bucket to the other. You'll need a strategy to cover the taxes stemming from the conversion. Here's why...

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When you convert a Traditional IRA to a ROTH, the IRS will treat the entire pre-tax amount being converted as taxable ordinary income in the year of the conversion. The total tax depends on your marginal federal + state income tax bracket (and sometimes additional taxes). Therefore, a conversion often requires a fairly large bucket of idle cash on hand to cover the taxes...

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This third bucket might be a checking or savings account in your bank, or some other non-retirement account from which you can pay the taxes generated by the conversion. But what if you don't have enough idle cash to pay for the conversion in a single tax year?...

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Alternative #1: WITHHOLDING -- One option is to simply have the taxes deducted from your IRA during the conversion process. However, this often means sacrificing more of the IRA's balance to taxes, so this option should be thought out very carefully.

Alternative #2: STAGES -- Another option is to spread the conversion over several tax years. In addition to being more affordable, this also lowers the risk of the conversion raising your AGI into a higher tax bracket.

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PRO TIP: Some opt to do their ROTH Conversion upon retiring but before they begin their retirement income. If they can afford to, they delay starting a pension or Social Security until the year after the Conversion, thus avoiding a higher tax bracket.

We only have a few questions left!...

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As a percentage of your IRA balance, how much do you have in non-IRA cash that could be used to pay the taxes on the conversion?* This field is required.

0-24%

25%-49%

50%-74%

75%-100%

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Do you anticipate receiving a large inheritance or windfall in the next 3 years?* This field is required.

YESNO

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Do you expect your tax bracket in the years to come to be higher or lower?* This field is required.

Higher in the years to come

Lower in the years to come

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Are you expecting to leave significant IRA assets to heirs (non-spouse)? * This field is required.

YESNO

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What is your current status in relation to Required Minimum Distributions (RMDs)?* This field is required.

Already taking them

Will start within 5 years

More than 5 years away

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What is your primary goal in considering a ROTH Conversion?* This field is required.

Lowering lifetime taxes

Reducing RMDs

Leaving tax-free inheritance

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On a scale of 1 to 100, your score below indicates how potentially helpful a chat about ROTH Conversions could be with one of our advisors.

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To schedule your appointment, either Michelle Vidales or Sarah Waters will reach out to compare calendars with you...>

IWA will never share your contact information with a 3rd party. This material is provided for informational purposes only and should not be construed as tax, legal, or accounting advice. Integrity Wealth Advisor, Inc., is not a tax advisor. Please consult your own tax professional regarding your specific situation before making any financial decisions.

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What name should we use when reaching out to you?* This field is required.

First Name

Last Name

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Your preferred phone number:* This field is required.

Please enter a valid phone number.

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example@example.com

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Finally, before you hit SUBMIT, would you prefer we reach out by phone or email?

Phone

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