December 2021

To Convert, or Not to Convert: Evaluating the Pros & Cons of Roth Conversions

When considering a Roth conversion, it is important to understand this basic concept: a Roth conversion is simply pulling forward a future tax obligation. In order to withdraw funds from a traditional IRA or other tax-deferred vehicle, someone, somewhere, at some point is going to have to pay taxes. Either you, your spouse, your children, or some other beneficiary will ultimately be taxed on distributions made from a tax-deferred account. A Roth conversion removes the tax guessing game and provides a clear answer to the question: “Who will be responsible for paying taxes on future distributions from my IRA and when will those taxes come due?”

The answer: You and Now!

S. Tucker Childs

Portfolio Manager & Financial Planner