One of the most common questions that I receive is “Should I convert my IRA to a Roth IRA?”
The thing to understand and consider is the higher taxable income. If you are in a year where your taxable income has come down it may be the best way forward.
Also remember to consider Social Security benefits and Medicare premiums that could be impacted by the decision.
The overall taxable costs may vary from roughly 10% to the high 30% range depending upon your personal situation. Of course for anyone considering any financial move it is best to seek out professional guidance. As a Fiduciary Registered Investment Advisor I sell no insurance or investment products and never take custody of client funds or securities. My clients interest is my only concern.
If you have multiple accounts be sure to update your beneficiary on each account. The advantage to doing this is the account will go directly to your designated beneficiary with out probate of a will. If your net worth is modest this may even help to avoid probate altogether.
Often having multiple retirement accounts may be beneficial in simplifying the management of your Required Minimum Distributions.
Highlights of changes for 2024
WASHINGTON — The Internal Revenue Service announced today that the amount individuals can contribute to their 401(k) plans in 2024 has increased to $23,000, up from $22,500 for 2023.
Highlights of changes for 2024
The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan is increased to $23,000, up from $22,500.
The limit on annual contributions to an IRA increased to $7,000, up from $6,500. The IRA catch‐up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‐of‐living adjustment but remains $1,000 for 2024.
5 reasons why you should add beneficiaries to your accounts right now
Bankrate.com by James Royal, Investing and wealth management reporter
But that little detail is often the reason that you have a financial account, for example, with a life insurer. And naming a beneficiary while you’re able to can often avoid untold problems and complications later when heirs or other family members struggle to arrange your affairs.
Bottom line
Naming a beneficiary is an easy thing to skip over when opening an account, but this small step can save a huge headache – and potentially a lot of money – later on. So take an inventory of your financial accounts today, and ensure that your wishes are up to date. Then resolve to keep the accounts updated annually so that you continue to avoid problems for yourself and your heirs.
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