Doing a Roth Conversion? Watch Out for This Big Trap.
There's a big gotcha you'll want to avoid.
Overview
If you're nearing retirement and have a large balance in a traditional IRA or 401(k), you may be worried about required minimum distributions (RMDs). RMDs begin at 73 or 75, depending on your year of birth. And they could cause you a massive tax headache.
By forcing you to withdraw a certain sum from your retirement savings each year, the IRS is also forcing you into a tax bill. And if you want to avoid RMDs or at least minimize them, you may be inclined to do Roth conversions ahead of when they begin.
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Details
Source
Originally published at www.fool.com.
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