Investment Update

 

January 2022

Your FP/CM Newsletter - January 2022

ROTH CONVERSION – WHAT IS A ROTH CONVERSION AND IS IT
SOMETHING YOU SHOULD CONSIDER?

VINCENT J. MARSDEN, Partner, SVP Financial Planning
vmarsden@fpcm.net

A Roth IRA is funded with after-tax dollars, and future qualified withdrawals are entirely tax-free. In addition, unlike traditional retirement accounts, Roth IRAs are not subject to required minimum distributions (RMDs) after you reach age 72, which gives you greater control over your taxable income in retirement and also benefits your designated IRA beneficiaries as withdrawals from their inherited Roth IRA are tax-free.

Although you cannot contribute to a Roth IRA if your modified adjusted gross income (MAGI) equals or exceeds certain limits ($144,000 for single filers and $214,000 for married couples filing jointly in 2022), there is currently no limitation on Roth IRA conversions, so you may convert all or part of your existing traditional IRA funds to a Roth IRA.

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