There are a lot of good options that you should consider when it comes to your retirement. IRAs are one of the best options for many people, especially if you are able to get your employer to help contribute to the account at the same time as you. A Roth IRA is a good idea for your overall retirement planning because they are able to grow without gaining any taxes, so you will be able to grow your retirement more than ever. In addition, you don’t have to take out the money while you are alive, meaning that you can hand it on to your heirs without taxes if you don’t use it up in your life.
Many people consider changing their traditional IRA over to a Roth IRA. This can help them to save a lot of money and their money will grow faster than ever before. Before you decide to go through with this change, make sure to contact the professionals at Johnson, Johnson, and Associates. We will be able to help you determine if changing your retirement plan is the best thing for you to do or if you should consider leaving it right where it is.
Determine if a Roth Retirement is Right for You
It is possible for anyone who has a traditional IRA to move it over to a Roth IRA; it doesn’t matter what your marital status or income is. Before 2010, you had to make less than $100,000 in a year, but this has been changed.
While there are a lot of advantages that come with a Roth IRA, it is not always the best option for all individuals. There are a few things that you will need to consider, such as the costs, time, and taxes, before you switch over to a Roth IRA. You will need to understand what the differences between a traditional IRA and a Roth IRA are before you get started. If you need help determining if this is the right decision for your retirement, make sure to contact the professionals at Johnson, Johnson, and Associates to get the help that you need.
Things to Consider for Roth IRA
Before you switch your traditional IRA over to a Roth IRA, you need to keep a few things in mind. First, if you are switching over to a Roth IRA, the money needs to stay in the account for at least five years in order to avoid the taxes and penalties that can eat into the money. Once you reach the five year mark, you will be able to get the money without taxes or penalties, but anything before that time can be taxed. You will also need to meet at least one of the following requirements to take out the Roth IRA tax free:
If you plan to retire in less than five years or won’t be able to keep the money in the account for at least the five years, you may want to consider sticking with your traditional IRA rather than trying to switch over to the Roth IRA, no matter how tempting they may be. The professionals at Johnson, Johnson, and Associates will be able to look over your unique situation and help you to choose whether switching retirement accounts in the best option for you.
Rolling the Traditional IRA to a Roth IRA
The first thing that you will need to figure out is whether you qualify for a Roth IRA. If you do qualify, you will be able to rollover the money from one of your traditional retirement plans right into a Roth IRA. Keep in mind that you will need to pay taxes on any pretax assets that are put into the new IRA. This can cost you a bit, so make sure to work with a professional to ensure that you are getting the best deal and that your taxes won’t be too steep in the upcoming years.
You should also keep in mind that if you have a Designated Roth Account and you want to move these to an IRA, you will need to roll them into a Roth IRA. This can be a challenge for some individuals, but with the right help, you will be able to get it all done.
Figuring out the right retirement plan for your needs and whether it is a financially efficient method for your retirement is going to be a challenge. Many people don’t figure in the taxes when they make changes in their retirement, and this can cost them a lot. Make sure to contact the professionals with Johnson, Johnson, and Associates to ensure that you are picking the right retirement plan for your needs for the lowest amount out of pocket.
Setting up your retirement can be a big step. You want to make sure that you are finding the right option that will keep you comfortable for the long term. When you are ready to work on your retirement plan, make sure to contact Fred Johnson at Johnson, Johnson and Associates, Inc. in Yeadon, PA. We will be able to help you find the right retirement for your life so you can live comfortably without having to worry about money.
Johnson, Johnson & Associates, Inc.