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If you're considering converting your traditional IRA to a Roth IRA, review these general guidelines.
To estimate how much you’ll end up with if you convert, crunch the numbers using a Roth IRA conversion calculator. Then for help specific to your situation, consult with a financial services representative or tax advisor, especially if you’re converting a large sum.
In general, you’ll have more at retirement after converting to a Roth IRA if you meet three conditions:
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You can afford to pay the conversion taxes from an account outside your IRA.
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You expect your tax bracket in retirement to stay about the same or increase.
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You’re many years from retirement or you plan to withdraw your IRA money over many years, or you plan to leave your IRA to your heirs.
Converting to a Roth IRA may also pay off if your IRA is small and made up mostly of non-deductible contributions. That’s because you already paid taxes on a large portion of your balance.
When evaluating whether to convert to a Roth IRA, you need to project your future tax bracket and investment returns.
Article is for educational purposes only and is not intended to provide specific tax or legal advice. For answers to tax questions, please see your tax professional. For legal questions, consult an attorney.
Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (800) 369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America. The Representative may also be a credit union employee that accepts deposits on behalf of the financial institution.
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