Is Roth IRA Conversion Really Worth It?

Have you considered converting a pre-tax retirement account into a Roth account as you approach retirement? ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ d66e3d435db5f9af09cbb55e10dcfecd *|MC_PREVIEW_TEXT|* ~/AARclAA~/RgRnMjG8P0TpaHR0cHM6Ly9hcnRpY2xlcy5zbWFydGFzc2V0LmNvbS9jb252ZXJ0aW5nLWFuLWlyYS10by1yb3RoL2luZGV4Lmh0bWw_dXRtX3NvdXJjZT1yYWlubWFrZXImdXRtX21lZGl1bT0mdXRtX2NhbXBhaWduPXJtYV9fZmFsY19jb250ZW50X3JvdGhjb252JnV0bV9jb250ZW50PXJvdGhfY29udl9rdXJ0X3BvcGFjdGFfbmV0d29yayZ1dG1fdGVybT1wb3BhY3RhX25ldHdvcmtfMTEwMTIzYl9STS1BRlItMjAyMzExMTFXA3NwY0IKZUWloU9l29eb3lIbdHJpc3RyYW1iYWxkd2luOTJAZ21haWwuY29tWAQAAAAA Is Roth IRA Conversion Really Worth It? Have you considered a Roth IRA conversion? Here’s a primer on the potential benefits, as well as the drawbacks [Take Retirement Quiz](~/AARclAA~/RgRnMjG8P0TVaHR0cHM6Ly9zbWFydGFzc2V0LmNvbS9yZXRpcmVtZW50L2ZpbmQtYS1maW5hbmNpYWwtcGxhbm5lcj91dG1fc291cmNlPXJhaW5tYWtlciZ1dG1fbWVkaXVtPSZ1dG1fY2FtcGFpZ249cm1hX19mYWxjX2RpcmVjdCZ1dG1fY29udGVudD1yb3RoX2NvbnZfa3VydF9wb3BhY3RhX25ldHdvcmsmdXRtX3Rlcm09cG9wYWN0YV9uZXR3b3JrXzExMDEyM2JfUk0tQUZSLTIwMjMxMTExVwNzcGNCCmVFpaFPZdvXm95SG3RyaXN0cmFtYmFsZHdpbjkyQGdtYWlsLmNvbVgEAAAAAA~~) Find up to three advisors that serve your area, free! SPONSORED BY SMARTASSET ~/AARclAA~/RgRnMjG8P0TpaHR0cHM6Ly9hcnRpY2xlcy5zbWFydGFzc2V0LmNvbS9jb252ZXJ0aW5nLWFuLWlyYS10by1yb3RoL2luZGV4Lmh0bWw_dXRtX3NvdXJjZT1yYWlubWFrZXImdXRtX21lZGl1bT0mdXRtX2NhbXBhaWduPXJtYV9fZmFsY19jb250ZW50X3JvdGhjb252JnV0bV9jb250ZW50PXJvdGhfY29udl9rdXJ0X3BvcGFjdGFfbmV0d29yayZ1dG1fdGVybT1wb3BhY3RhX25ldHdvcmtfMTEwMTIzYl9STS1BRlItMjAyMzExMTFXA3NwY0IKZUWloU9l29eb3lIbdHJpc3RyYW1iYWxkd2luOTJAZ21haWwuY29tWAQAAAAA Have you considered converting a pre-tax retirement account into a Roth account as you approach retirement? Converting pre-tax retirement accounts such as IRAs to after-tax Roth IRAs could allow you to keep growing funds tax-free and then make withdrawals in retirement without paying taxes. Is this the right retirement savings strategy for you? To find out, it could be a good idea to [speak with a financial advisor.](~/AARclAA~/RgRnMjG8P0TVaHR0cHM6Ly9zbWFydGFzc2V0LmNvbS9yZXRpcmVtZW50L2ZpbmQtYS1maW5hbmNpYWwtcGxhbm5lcj91dG1fc291cmNlPXJhaW5tYWtlciZ1dG1fbWVkaXVtPSZ1dG1fY2FtcGFpZ249cm1hX19mYWxjX2RpcmVjdCZ1dG1fY29udGVudD1yb3RoX2NvbnZfa3VydF9wb3BhY3RhX25ldHdvcmsmdXRtX3Rlcm09cG9wYWN0YV9uZXR3b3JrXzExMDEyM2JfUk0tQUZSLTIwMjMxMTExVwNzcGNCCmVFpaFPZdvXm95SG3RyaXN0cmFtYmFsZHdpbjkyQGdtYWlsLmNvbVgEAAAAAA~~) Research suggests people who work with a financial advisor feel more at ease about their finances and could end up with about 15% more money to spend in retirement.¹ A 2022 Northwestern Mutual study found that 62% of U.S. adults admit their financial planning needs improvement. However, only 35% of Americans work with a financial advisor.² Roth IRA Conversion Basics The difference between a Roth IRA and other types of IRAs is that the Roth account is funded with after-tax dollars. That means you pay taxes on funds before contributing them to the Roth, and you can’t deduct contributions from your taxable income. However, the money in the Roth account grows tax-free and you can withdraw funds after you retire without paying taxes. You can convert funds in pre-tax IRA accounts to a Roth IRA. This includes traditional IRAs, SEP IRAs and Simple IRAs. When you convert pre-tax money in a regular IRA to a Roth IRA, you have to pay taxes on it at your current rate. The conversion amount is treated as regular income, which can bump you into a higher tax bracket and cause a high tax bill for the conversion year. Despite the tax bill, a Roth IRA conversion can be worth it for a couple of reasons. [Learn about the potential benefits here.](~/AARclAA~/RgRnMjG8P0TpaHR0cHM6Ly9hcnRpY2xlcy5zbWFydGFzc2V0LmNvbS9jb252ZXJ0aW5nLWFuLWlyYS10by1yb3RoL2luZGV4Lmh0bWw_dXRtX3NvdXJjZT1yYWlubWFrZXImdXRtX21lZGl1bT0mdXRtX2NhbXBhaWduPXJtYV9fZmFsY19jb250ZW50X3JvdGhjb252JnV0bV9jb250ZW50PXJvdGhfY29udl9rdXJ0X3BvcGFjdGFfbmV0d29yayZ1dG1fdGVybT1wb3BhY3RhX25ldHdvcmtfMTEwMTIzYl9STS1BRlItMjAyMzExMTFXA3NwY0IKZUWloU9l29eb3lIbdHJpc3RyYW1iYWxkd2luOTJAZ21haWwuY29tWAQAAAAA) What to Consider Before a Roth Conversion Deciding whether or not to convert regular IRA assets to a Roth IRA calls for careful evaluation of your financial and tax situation. That’s where a [financial advisor](~/AARclAA~/RgRnMjG8P0TVaHR0cHM6Ly9zbWFydGFzc2V0LmNvbS9yZXRpcmVtZW50L2ZpbmQtYS1maW5hbmNpYWwtcGxhbm5lcj91dG1fc291cmNlPXJhaW5tYWtlciZ1dG1fbWVkaXVtPSZ1dG1fY2FtcGFpZ249cm1hX19mYWxjX2RpcmVjdCZ1dG1fY29udGVudD1yb3RoX2NvbnZfa3VydF9wb3BhY3RhX25ldHdvcmsmdXRtX3Rlcm09cG9wYWN0YV9uZXR3b3JrXzExMDEyM2JfUk0tQUZSLTIwMjMxMTExVwNzcGNCCmVFpaFPZdvXm95SG3RyaXN0cmFtYmFsZHdpbjkyQGdtYWlsLmNvbVgEAAAAAA~~) can be invaluable. But with thousands of options available, it can seem daunting to choose one. Try SmartAsset's [no-cost tool](~/AARclAA~/RgRnMjG8P0TVaHR0cHM6Ly9zbWFydGFzc2V0LmNvbS9yZXRpcmVtZW50L2ZpbmQtYS1maW5hbmNpYWwtcGxhbm5lcj91dG1fc291cmNlPXJhaW5tYWtlciZ1dG1fbWVkaXVtPSZ1dG1fY2FtcGFpZ249cm1hX19mYWxjX2RpcmVjdCZ1dG1fY29udGVudD1yb3RoX2NvbnZfa3VydF9wb3BhY3RhX25ldHdvcmsmdXRtX3Rlcm09cG9wYWN0YV9uZXR3b3JrXzExMDEyM2JfUk0tQUZSLTIwMjMxMTExVwNzcGNCCmVFpaFPZdvXm95SG3RyaXN0cmFtYmFsZHdpbjkyQGdtYWlsLmNvbVgEAAAAAA~~) to get matched with up to three vetted financial advisors serving your area, each obligated to work in your best interest. It only takes a few minutes, and you earn a free consultation to compare and decide on one who fits your needs. [ Learn about the pros and cons of Roth IRA conversion »](~/AARclAA~/RgRnMjG8P0TpaHR0cHM6Ly9hcnRpY2xlcy5zbWFydGFzc2V0LmNvbS9jb252ZXJ0aW5nLWFuLWlyYS10by1yb3RoL2luZGV4Lmh0bWw_dXRtX3NvdXJjZT1yYWlubWFrZXImdXRtX21lZGl1bT0mdXRtX2NhbXBhaWduPXJtYV9fZmFsY19jb250ZW50X3JvdGhjb252JnV0bV9jb250ZW50PXJvdGhfY29udl9rdXJ0X3BvcGFjdGFfbmV0d29yayZ1dG1fdGVybT1wb3BhY3RhX25ldHdvcmtfMTEwMTIzYl9STS1BRlItMjAyMzExMTFXA3NwY0IKZUWloU9l29eb3lIbdHJpc3RyYW1iYWxkd2luOTJAZ21haWwuY29tWAQAAAAA) Try SmartAsset's Financial Advisor Matching Tool Get retirement ready. Take this no-cost quiz to get matched with up to 3 vetted financial advisors serving your area. [Get Started](~/AARclAA~/RgRnMjG8P0TVaHR0cHM6Ly9zbWFydGFzc2V0LmNvbS9yZXRpcmVtZW50L2ZpbmQtYS1maW5hbmNpYWwtcGxhbm5lcj91dG1fc291cmNlPXJhaW5tYWtlciZ1dG1fbWVkaXVtPSZ1dG1fY2FtcGFpZ249cm1hX19mYWxjX2RpcmVjdCZ1dG1fY29udGVudD1yb3RoX2NvbnZfa3VydF9wb3BhY3RhX25ldHdvcmsmdXRtX3Rlcm09cG9wYWN0YV9uZXR3b3JrXzExMDEyM2JfUk0tQUZSLTIwMjMxMTExVwNzcGNCCmVFpaFPZdvXm95SG3RyaXN0cmFtYmFsZHdpbjkyQGdtYWlsLmNvbVgEAAAAAA~~) This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest. SmartAsset.com is not intended to provide legal advice, tax advice, accounting advice or financial advice (Other than referring users to third party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). SmartAsset is not a financial planner, broker or tax adviser. The Service is intended only to assist you in your understanding of financial organization and decision-making and is broad in scope. Your personal financial situation is unique, and any information and investing strategies obtained through SmartAsset.com may not be appropriate for your situation. Accordingly, before making any final decisions or implementing any financial strategy, you should consider obtaining additional information and advice from your accountant or other financial advisers who are fully aware of your individual circumstances. SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser. SmartAsset’s services are limited to referring users to third party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. SmartAsset does not review the ongoing performance of any Adviser, participate in the management of any user’s account by an Adviser or provide advice regarding specific investments. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors. Sources: 1. [“Planning and Progress”, Northwestern Mutual (2022)](~/AARclAA~/RgRnMjG8P0REaHR0cHM6Ly9uZXdzLm5vcnRod2VzdGVybm11dHVhbC5jb20vcGxhbm5pbmctYW5kLXByb2dyZXNzLXN0dWR5LTIwMjJXA3NwY0IKZUWloU9l29eb3lIbdHJpc3RyYW1iYWxkd2luOTJAZ21haWwuY29tWAQAAAAA) 2. ["Journal of Retirement Study Winter" (2020).](~/AARclAA~/RgRnMjG8P0QqaHR0cHM6Ly9qb3IucG0tcmVzZWFyY2guY29tL2NvbnRlbnQvNy8zLzQ2VwNzcGNCCmVFpaFPZdvXm95SG3RyaXN0cmFtYmFsZHdpbjkyQGdtYWlsLmNvbVgEAAAAAA~~) The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of your future results. Please follow the link to see the methodologies employed in the [Journal of Retirement study.](~/AARclAA~/RgRnMjG8P0QqaHR0cHM6Ly9qb3IucG0tcmVzZWFyY2guY29tL2NvbnRlbnQvNy8zLzQ2VwNzcGNCCmVFpaFPZdvXm95SG3RyaXN0cmFtYmFsZHdpbjkyQGdtYWlsLmNvbVgEAAAAAA~~) American Freedom Report PO Box 1177 Fort Collins, CO 80522 [unsubscribe](~/AARclAA~/RgRnMjG8P0RmaHR0cHM6Ly9vcHRvdXQuYW1lcmljYW5mcmVlZG9tcmVwb3J0LmNvbS91bnN1YnNjcmliZS8_Yj1EYWlseS1BbGVydHMmZT10cmlzdHJhbWJhbGR3aW45MiUyNTQwZ21haWwuY29tVwNzcGNCCmVFpaFPZdvXm95SG3RyaXN0cmFtYmFsZHdpbjkyQGdtYWlsLmNvbVgEAAAAAA~~) | [manage data preferences](~/AARclAA~/RgRnMjG8P0QuaHR0cHM6Ly9hbWVyaWNhbmZyZWVkb21yZXBvcnQuY29tL3ByaXZhY3kuaHRtbFcDc3BjQgplRaWhT2Xb15veUht0cmlzdHJhbWJhbGR3aW45MkBnbWFpbC5jb21YBAAAAAA~)