6 Reasons You Should NOT Do a Roth Conversion

Roth IRAs come with some great tax advantages, but converting a traditional IRA to a Roth doesn’t make sense for everyone.

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With the end of 2020 approaching, many people will turn their sights toward year-end tax planning. A hot topic for high-income individuals and couples is whether to convert a traditional individual retirement account (IRA) into a Roth IRA. While there is no shortage of guidance available from financial advisers and accountants to help identify where a Roth IRA conversion makes sense, there are also plenty of scenarios where it doesn’t.

A benefit of a Roth conversion is that it can allow you to pay taxes on traditional IRA assets now instead of later if you expect to be subject to a higher marginal tax rate down the road. By paying the income tax now, your contributions and earnings grow tax-free into the future inside the Roth IRA.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Patricia Sklar, CPA, CFP®, CFA®
Wealth Adviser, CI Brigthworth

Patricia Sklar is a wealth adviser at CI Brightworth, an Atlanta wealth management firm. She is a Certified Public Accountant, a CERTIFIED FINANCIAL PLANNER™ practitioner and holds the Chartered Financial Analyst® designation.  Sklar uses her CPA and investment background to help develop and implement financial planning strategies for high-net-worth and high-income earning individuals.