Itâ€™s no doubt that the Roth IRAis a favorable option to many people when it comes to retirement planning. And after the fiscal cliff deal, the Roth IRAjust keeps getting better and better for more and more people. How do you know whetherit is right for you?
A recent CNN Money article titled â€œMore savers can convert to Roth 401(k)sunder fiscal cliff dealâ€ says it all. Nevertheless, there is more to aRoth IRA than meets the unaided eye.
Essentially, the Roth IRAreverses the normal IRA by requiring that you pay the income taxes on moneydeposited in the account up front when you deposit them instead of when youwithdraw the money later. Also, in addition to no income taxes when withdrawn,with a Roth IRA you have no Required Minimum Distributions (RMDs) later on.
The fiscal cliff deal lets morepeople, and those of lower incomes, convert their IRAs into Roth IRAs if theysettle the tax burden up front. This can help with estate planning for theirloved ones, too.
According to experts, however, aRoth IRA may not be right for some folks. A recent MarketWatch article titled â€œRoth conversions easier, but are they right?â€addresses this concern.
As with all things financial, aswell as legal â€¦look before you leap. This is especially true when it comes totax law changes brought by the fiscal cliff deal.
At Idaho Estate Planning we are theexperts you need to know and trust. Work with us and we'll put together a planthat works for you and your loved ones. Remember, good planning is no accident.