Roth IRA or traditional IRA? For some adults, a conversion to a Roth IRA could make a ton of sense and boost retirement savings.
Depositing in a Roth IRA won’t get you a tax deduction, but withdrawing from your Roth is tax-free if you are at least 59.5 years old and you have had the account for more than five years. Be careful, though: If you’re under 59.5 years old and you withdraw money from your Roth IRA early, you could get hit with a 10 percent penalty.
Roth IRAs aren’t subject to the minimum distribution requirements that affect traditional IRAs, which means that you aren’t forced to begin withdrawing money from your Roth when you are 70.5 years old.
Roth conversions aren’t for everyone: you will have to pay tax on the total amount of money that you convert if you do. If you’re older and near retirement, you may not want to convert to a Roth because your money won’t grow enough to recoup the taxes you paid because of the conversion. Take this into consideration when you’re evaluating how much money you may want to convert, because it’s possible to convert a portion of your savings.
Depositing in a Roth IRA won’t get you a tax deduction, but withdrawing from your Roth is tax-free if you are at least 59.5 years old and you have had the account for more than five years. Be careful, though: If you’re under 59.5 years old and you withdraw money from your Roth IRA early, you could get hit with a 10 percent penalty.
Roth IRAs aren’t subject to the minimum distribution requirements that affect traditional IRAs, which means that you aren’t forced to begin withdrawing money from your Roth when you are 70.5 years old.
Roth conversions aren’t for everyone: you will have to pay tax on the total amount of money that you convert if you do. If you’re older and near retirement, you may not want to convert to a Roth because your money won’t grow enough to recoup the taxes you paid because of the conversion. Take this into consideration when you’re evaluating how much money you may want to convert, because it’s possible to convert a portion of your savings.
