Reported 10 months ago
Experts suggest that the expiration of tax cuts in 2025 may make it advantageous for savers to consider converting their existing retirement accounts, like a 401(k) or traditional IRA, to a Roth IRA due to the potential rise in taxes after the tax cuts expire. A Roth IRA allows for tax-free investing and withdrawals in retirement, and converting to one involves paying taxes on the converted amount. While there are benefits to a Roth conversion, such as tax-free compounding and withdrawals, individuals should be aware of potential pitfalls, like the "pro rata rule," and consider consulting a financial advisor before making this decision.
Source: YAHOO