To get the full RFL experience, watch the episode here at https://youtu.be/1N6xxEvKris
What if you could save nearly a million dollars on your taxes? We unravel the mysteries and benefits of Roth conversions, answering the pivotal question: why would the federal government allow such a lucrative strategy? Kicking off with a recap of the essentials and a real-life success story, we break down the lifetime tax savings that Roth conversions can offer. Discover the key considerations and logistics you need to weigh before making a decision, ensuring you're fully prepared to leverage this powerful financial tool.
For couples nearing retirement, the thought of an immediate tax bill from a Roth conversion can feel like crossing a glass-floored bridge over a canyon—terrifying, but worth it. We tackle these fears, emphasizing the importance of early Roth IRA setup, the five-year clock rule, and keeping conversions within the 22% to 24% tax brackets. Collaborate with a CPA to navigate these waters effectively, managing your tax payments and determining the optimal amount to convert. We offer a step-by-step guide to ensure your Roth conversion strategy is both smart and seamless.
Understanding Roth IRA distributions can be complex, but we've got you covered. Learn the rules for tax and penalty-free withdrawals, and why starting the five-year clock with even a minimal contribution is crucial. We clarify the distinctions between contributions, conversions, and earnings, and illustrate how age and the five-year rule impact your ability to access funds. As we wrap up, we give you a sneak peek into our next episode on college savings, a much-awaited topic suggested by Andrea. Don't miss out on these vital insights that could secure your financial future.
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