ARE ROTH IRA CONVERSIONS A GOOD IDEA IN RETIREMENT?

I often tell the individuals I work with that the only way to reduce their tax bill in retirement is to spend less money if they have no tax-free savings or income to look forward to. This is often enough to begin an engaged discussion about the potential benefits of Roth contributions and conversions. If you are early on in your income earning potential and/or career, Roth contributions and conversions can make a lot of sense. If you are in the latter phases of your career, with a high income and in a high marginal tax bracket, Roth contributions and conversions might not seem as beneficial and once we reach retirement, many of us abandon the concept of a Roth altogether. Depending on your situation, this may not be in your best interest.

Today, we’ll focus on Roth IRA conversions in retirement. I’ll start by first defining what a Roth IRA conversion is. Then I’ll provide you with some of the key decision-making factors to consider that may help you determine if Roth IRA conversions in retirement are a good tactic for your retirement tax planning strategy.