Article from U.S. News & World Report
HISTORICALLY LOW TAX rates make now an ideal time to convert traditional individual retirement accounts into Roth accounts. Financial planners and tax advisors are advising their clients to switch soon, to take advantage of the Tax Cuts and Jobs Act.
“It’s the best time in history to convert to a Roth,” says Elijah Kovar, co-founder of Great Waters Financial in Minneapolis. “Between now and 2025, the last year of tax reform, taxes are on sale.”
With a traditional IRA, you don’t pay taxes on the money you deposit, but withdrawals are taxed as ordinary income. With a Roth, you deposit money on which you’ve already paid taxes, so the money you withdraw in retirement is not taxable. The reason to convert now is so you don’t get hit with higher taxes when you take distributions in retirement.
From Greg Storen: “This is the best time in history to consider a Roth IRA conversion with historically low tax rates. Give us a call (317-733-1000) to discuss how Roth Conversions could benefit you.”