Reported 3 days ago
As individuals approach retirement, particularly those aged 62 with significant funds in a 401(k), the decision to convert a portion of their pre-tax accounts to a Roth IRA becomes relevant to mitigate taxes and Required Minimum Distributions (RMDs). While Roth IRAs provide tax-free growth and no RMDs, the immediate tax implications of conversion can be hefty, making staggered conversions a more strategic approach to limit tax brackets. Ultimately, the decision hinges on whether the long-term tax benefits outweigh the upfront costs, with personalized advice from a financial advisor recommended for tailored guidance.
Source: YAHOO