The Importance of Roth Conversions, Ep #93

<p>Roth conversions are a useful tool that you should consider taking advantage of as you approach retirement. If you have a Roth IRA, it would grow tax-free for life. When you take withdrawals in retirement, they will be tax-free. With a traditional IRA, you pay taxes whenever you take withdrawals. So if you take a $5,000 withdrawal, you have to pay Federal and State income taxes. But <em>when</em> should you start doing Roth conversions? Listen to this episode of Retirement Made Easy to hear my thoughts.</p> <p> <<<<<<<<<<<<<<<PLAYER CODE GOES HERE>>>>>>>>>>>>>>>></p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li>[3:20] How to get a FREE retirement assessment</li> <li>[5:26] Why I don’t talk about cryptocurrency</li> <li>[8:52] What you need to know about the Secure Act 2.0</li> <li>[15:12] The basics of Roth conversions</li> </ul> <h2>What you need to know about the Secure Act 2.0</h2> <p>The Secure Act 2.0 will likely pass in the senate with minor changes. Here’s what you need to know.</p> <p>If a student is paying toward student loan debt, their company can “match” that payment and contribute it to the student’s 401k—even if the student isn’t directly contributing any money to the 401k. Employers are being incentivized to help students pay off loans.</p> <p>If you contribute to a 401k and you’re over 50, the most you can currently contribute is up to $27,000 per year. Part of it is the $6,5000 catch-up allowed when you turn 50 (If you’re under 50, you can contribute $20,500) The catch-up allowance will be increased from $6,500 to $10,000 for anyone 60 or older. </p> <p>Currently, once you turn 72, you must start taking required minimum distributions from your IRA and pay taxes on the money. This bill will change the age requirement gradually. By 2032, the RMD age will be 75. This gives people three more years where they aren’t forced to pay taxes on RMDs. </p> <p>This bill is huge. It will allow you more time for your money to grow tax-deferred. Who wouldn’t want an extra t