Roth conversions allow individuals to shift funds from traditional IRAs or 401(k)s to Roth accounts, providing access to tax-free income during retirement, in addition to avoiding required minimum distributions (RMDs). This strategy can also serve as an estate-planning tool. Even if one misses opportunities to contribute directly to a Roth, converting traditional retirement accounts is still feasible. However, individuals need to be aware of the tax implications of these conversions, particularly if significant income is involved, thus consulting with a financial professional is recommended.
A Roth conversion gives you access to tax-free income in retirement and avoids required minimum distributions, making it a strategic move for planning.
Roth accounts not only provide tax-free withdrawals, which is a financial advantage during retirement, but they also facilitate excellent estate planning due to the lack of RMDs.
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