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January 10, 2019

Year-End Reminder: Roth IRA Conversions


Tip by: Denise Appleby

A Roth IRA conversion occurs when assets are moved from a Traditional, SEP or SIMPLE IRA to a Roth IRA.

Amounts can also be converted from a qualified plan, 403(b) and/or governmental 457(b) plan.

Generally, amounts converted to a Roth IRA are treated as ordinary income, and any pre-tax amount is taxable. While a Roth IRA conversion can be a good tax-strategy, it is not suitable for everyone. As such, a Roth conversion analysis should be done to determine suitability.

If you are planning to covert amounts from a traditional IRA or other retirement account to a Roth IRA for this year, the amount must leave that account by the end of the year.

Roth IRA conversions can no longer be reversed (.Recharacterized) can. Therefore, careful consideration must be given to the decision to perform a Roth conversion.

Consult with your financial and/or tax professional regarding this and other retirement planning matters.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.


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