With a traditional IRA, you may qualify for a tax deduction when you invest your money. But later, when you take the money out in retirement, all those distributions are taxed. The Roth IRA is the opposite. It has no deduction when you put the money in, but later, all distributions are tax-free when you take the money out during retirement.

By converting from a traditional IRA to a Roth IRA, future gains become tax-free. But when you convert funds from a traditional IRA to a Roth IRA, you must pay taxes on the converted amount that year. You can choose to convert all or just part of a traditional IRA to a Roth IRA. Timing should be based upon when you are in a lower tax bracket or have other offsetting deductions. We can help you gauge the costs and benefits of a Roth conversion in your situation. Beware of penalties if you may need to tap into your Roth IRA funds in the next five years and you are or will be younger than age 59.5 when you need these funds.

Give us a call today and we’ll help you evaluate your options. It’s important that all investment titling and beneficiary designations are working in concert with your will or other estate planning documents. Speak with your estate and tax planning professionals to evaluate any potential tax ramifications and call us today to learn more about strategies and resources that may help you preserve your nest egg.

Various financial industries strive to create standards of excellence through accreditation programs. When choosing a Financial Advisor, here are some designations you should look for.

A CFP is a Certified Financial Planner who must pass stringent standards for Education, Examination, Experience and Ethics while providing financial planning to clients.

A ChFC is a Chartered Financial Consultant and is very similar to the CFP except it does not require a comprehensive board examination.

A CLU is a Chartered Life Underwriter. This is the most respected insurance designation for agents who specialize in life insurance and estate planning.

A CPA is a Certified Public Accountant who has passed required college courses and has a bachelor’s degree. In addition, they have passed a 19 hour 2-day exam. Their focus is taxes, auditing and bookkeeping.

A CFA is a Chartered Financial Analyst who has passed a rigorous course of study. Their focus is investment analysis and portfolio management.

There are many new designations that have developed recently. But most are not as rigorously tested as CFP and CPA. Designations are an important part of your selection process. Always choose someone who understands your situation and focuses on providing for your needs. Ask us about our experience and our methodology to provide for your needs today.