Today’s low tax rates may not last! Consider with your tax and financial advisors to convert tax deferred accounts like Traditional IRAs to a Roth IRA! This is called a Roth Conversion.
Advantage: Take advantage of paying tax at today’s low rates and have all the money in your Roth plus earnings, grow tax free. If your income has had a tough year due to Covid, It may be advantageous, to pay tax at lower bracket tiers than usual for you; but make sure of the plan!
Plan it: You will need to pay any taxes due with outside cash available. The ability to undo the conversion at a later date is no longer available, so make sure the plan is in place on how you will pay the tax.
It’s complex and not for everyone so consult your tax and financial advisors!
Interested in hearing more on this topic? Send us an email! info@RockinFinance.com