Roth conversions involve transferring funds from a traditional IRA to a Roth IRA. The primary advantage of a Roth IRA is that the money grows tax-free, and withdrawals during retirement are also tax-free, providing significant long-term benefits. Some people argue that there’s an Opportunity Cost involved. Here are some additional key points to consider.
Unlike traditional IRAs where you must begin distributions at a specific age, Roth IRAs do not require you to take RMDs (required minimum distributions) during your lifetime. This allows your investments to continue growing tax-free for a longer period, giving you more control over your retirement funds.
Also, under the SECURE Act, your beneficiaries can inherit your Roth IRA. This can yield significant financial planning and estate planning advantages, providing your loved ones with valuable tax-free assets.
Let’s address what some people call:
One common concern about Roth conversions is the opportunity cost of paying the conversion tax upfront instead of investing that amount. Some argue that by paying taxes now, you lose out on the potential future earnings that those funds could have generated if invested. However, this argument overlooks a crucial point: there is no opportunity cost if tax rates remain the same at conversion and later at distribution.
To understand this better, download our comprehensive free guide, “Roth Conversions – Dispelling the Opportunity Cost Argument.” It provides a detailed explanation of why this belief is a misconception and how a Roth conversion can still be a sound financial decision despite upfront taxes.
Evaluating Roth conversion strategies requires careful consideration of your current financial situation and future goals. At RFG Wealth Advisory in Argyle, TX, our financial planners help you navigate this complex decision-making process. Contact me, I’m Chris Robinson, President, and lead financial advisor, to schedule a consultation. Let’s discuss how a Roth conversion can benefit your unique financial circumstances.
At RFG Wealth, our fiduciary duty ensures your interests always come first, and we maintain a transparent fee structure for your peace of mind.
Converting your IRA balances can be a smart move, especially considering the historically low tax rates we are currently experiencing. By planning and converting in stages, you can optimize your tax situation and secure a more tax-efficient retirement.
Take control of your financial future today by considering a Roth conversion. We look forward to assisting you in making the best decision for your retirement planning needs.
Financial Success Doesn’t Happen by Chance.
Contact lead advisor Chris Robinson with RFG Wealth Advisory in Argyle, Texas to discuss your questions.
RFG Wealth Advisory is an independent, fee-only Registered Investment Advisor firm in Argyle, Texas. At RFG Wealth, our fiduciary duty ensures your interests always come first, and we maintain a transparent fee structure for your peace of mind. Contact us today!
Investment advice is offered through RFG Wealth Advisory, a Registered Investment Advisor.
Schedule a Free Consultation“These materials have been independently produced by RFG Wealth Advisory. RFG Wealth Advisory is independent of, and has no affiliation with, Charles Schwab & Co., Inc. or any of its affiliates (“Schwab”). Schwab is a registered broker-dealer and member SIPC. Schwab has not created, supplied, licensed, endorsed, or otherwise sanctioned these materials nor has Schwab independently verified any of the information in them. RFG Wealth Advisory provides you with investment advice, while Schwab maintains custody of your assets in a brokerage account and will effect transactions for your account on our instruction.”
The LPL Finanical registered representatives associated with this website may discuss and/or transact business only with residents in the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.
130 Old Town Blvd S # 100,
Argyle, TX 76226,
Tel: (940) 464-410
Our websites require some cookies to function properly (required). In addition, other cookies may be used with your consent to analyze site usage, improve the user experience and for advertising.