Episode #9: How Tax Code Changes Affect Roth IRA Conversions


The Principle:

In the wake of the new tax code, find out whether a Roth IRA conversion is right for you.

(Click the featured times below to jump forward in the episode)

Honest Takes:

[00:28] – Given The New Tax Code, Is It A Good Time To Convert Retirement Savings?

  • We get this question all the time. Folks want to know how to create tax-free income in retirement. It’s an easy question, but it doesn’t have an easy answer.

[1:09] – No Easy Answers. 

  • You can invest in a Roth IRA, but you’ve got to use after-tax money, and you’ve got to use earned income. This gets tricky when you consider that your Social Security, pension, and rental income don’t count as earned income. However, you can take existing IRAs and convert them into a Roth IRA. you need your accountant to help with this as it hits on the complexities of tax planning.

[3:36] – Taking Advantage Of The Tax Code As A Business Owner.  

  • Let’s say you decide to quit your job and put all of your money in a business. It takes time to make a business profitable. Therefore, you’re probably going to lose money for the first couple of years. This will technically drop your income level, and you can save in taxes when you convert your IRA into a Roth IRA. Thanks to the tax code, taking advantage of dips in your taxable income can save you hundreds of thousands of dollars in taxes.

More To Learn:

  • [1:44] – How IRAs Are Taxed.
  • [2:18] – Take Advantage Of The Tax Code.
  • [4:44] – No RMDs On Roth IRAs.

Today’s Truth:

Other Virtues:

The host: Brian Bowen – Contact

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