Year End Roth Conversions

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Year End Roth Conversions

ATLAS Lifestyle Planning Group (ATLAS LPG) brings you an informational mini-series, focused on a few key areas of financial planning that could help you wrap up the year feeling better prepared.


Don’t forget to have a discussion with your tax professional about Roth IRA conversions before the end of the year.  Roth IRA conversions can be helpful for strategic income planning and legacy purposes.  Though everyone’s financial situation is unique, knowing all the tools available will allow you to feel better prepared when faced with some challenging decisions in the future.

Tax Bracket Analysis:

  • If you anticipate being in a higher tax bracket in the future, it might make sense to convert a portion of your traditional IRA to a Roth IRA now while you are in a lower tax bracket, or to stay within a specific tax bracket.  This can help manage your tax liability while taking advantage of the tax-free growth in a Roth.
  • If you make charitable contributions, you might consider donating appreciated securities from your taxable accounts instead of cash.  This can help offset the tax impact of a Roth conversion.

Coordinate with Other Income:

  • Be mindful of other sources of income, such as bonuses, capital gains, or other windfalls.  Coordinating Roth conversions with lower-income years can help minimize the overall tax impact.
  • Roth IRAs are not subject to required minimum distributions (RMDs) during the account owner’s lifetime, making them useful for estate planning.
  • If you are on Medicare, be aware of any impact on your premiums by generating more taxable income in any given year.

Remember that tax laws and individual financial situations can change, so it is essential to stay informed and adjust your personal strategy accordingly.  Given the complexity of tax and retirement laws like the SECURE Act, it is very important to consult with your financial advisor and tax professional. They can help tailor a Roth conversion strategy that aligns with your specific goals and circumstances, and can help you understand how this strategy will impact you.  There may even be some benefit to discussing the new rule that comes into effect in a few weeks which allows you to turn an old 529 plan into a Roth IRA.

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This blog is intended for general informational purposes, and should not be taken as strategy or advice by ATLAS Lifestyle Planning Group (ATLAS LPG).  ATLAS LPG encourages all individuals to consult their financial professional about these or other matters which concern their personal finances or financial strategy.  If you do not have a financial advisor, or feel you may benefit from seeking the advice of a different financial advisor, please do not hesitate to reach out directly to your ATLAS office, or contact us HERE.  Your ATLAS LPG Team is always ready and happy to help, whatever your needs may be!

 Investment advisory services offered through ATLAS Lifestyle Planning Group (ATLAS LPG), a Registered Investment Advisor.  ATLAS LPG will only provide investment advisory services in jurisdictions where it is registered as an investment adviser or exempt from registration.  Insurance and annuities offered through ATLAS Risk Management Group (ATLAS RMG) CA License # 0M41231.  ATLAS LPG and ATLAS RMG are separate entities and neither provides legal or tax advice.