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Roth IRA Conversion


Choosing between a traditional IRA and a Roth IRA is a personal choice that depends upon multiple considerations including age, income, and financial goals.

Roth IRA Benefits
Tax-Free Distributions

By converting a traditional IRA to a Roth IRA, taxes on the account will stop. As part of the conversion process, your client will pay all of the taxes on the amount in the traditional IRA and there will be no more taxes on the account. The Roth IRA will grow tax-free and all future withdrawals will be TAX-FREE!

Favorable Tax Treatment for Heirs

Not only does a Roth IRA provide tax-free growth and tax-free income to the owner, but beneficiaries of Roth IRAs also do not owe income tax on withdrawals and therefore can stretch out distributions for many years making the Roth IRA a great wealth-transfer option.

Remove the Minimum Distribution Requirement

A Roth IRA conversion of a traditional IRA will also result in no required minimum distributions during the account holder’s life. If the account holder does not need the money, they will not be required to take a distribution in any given year and the required minimum distribution will not increase each year. This translates to more growth opportunity for the account.

No Income Limits

Significant changes to IRA laws in recent years now allow everyone, regardless of income level, to convert traditional IRAs into Roth IRAs. This creates the opportunity for individuals to stop the tax accumulation on their IRAs.

Additional Benefits

If the need arises to have access to your Roth IRA money early, Roth contributions can be withdrawn penalty-free and tax-free at any time, even before age 59 ½. In addition, during the first five years after your first contribution into a Roth IRA, you can withdraw up to $10,000 penalty-free to pay for qualified first-time home buyer expenses.

See the full article by downloading the accompanying PDF

Source: American National Insurance Company