The Hidden Roth Conversion Trap Too Many People Don't Talk About
It's an important thing to keep on your radar.
Overview
Roth conversions can be an effective part of your retirement planning strategy for good reason. By moving money from a traditional IRA or 401(k) into a Roth IRA, you pay taxes up front in exchange for tax-free gains and tax-free withdrawals later on.
Just as importantly, a Roth conversion can help you avoid or minimize required minimum distributions, or RMDs. Those mandatory withdrawals can drive up your tax bills in retirement and, in some cases, interfere with your legacy plans.
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Originally published at www.fool.com.
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