Converting 401(k)s and IRAs to Roth Status Can Save Tax Dollars

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Tax fliling Photo by Kelly Sikkema on Unsplash

Robert M. Ryerson has worked as a Certified Financial Planner since 1991. On a mission to help America’s workers secure their financial freedom during retirement, Robert M. Ryerson educates people about to retire on required minimum distributions (RMDs) and how they will affect their taxes during retirement.

Once a person reaches the age of 70 and a half, he or she must make RMDs from his or her 401(k) or IRA. These distributions will be usually be taxed. These taxes can be considerable, especially if the person is already collecting social security or is earning income from other investments. However, with some planning, you can save tax dollars occasioned by RMDs.

A good way to reduce taxes on RMDs is to convert traditional IRAs or 401(k)s to Roth IRA investments. Those working with employers offering Roth 401(k) options can convert these funds. If this option is not available to you through your work, you can still convert your IRA to Roth status. This should be done before retiring and before reaching age 70 and a half. When putting funds into a Roth IRA, you are taxed now when you are still working, rather than later on after retirement. This can generate huge savings, especially if you expect to earn significant amounts of money after retirement.

Published by Robert Ryerson

A financial professional with more than three decades of experience, Robert Ryerson works closely with clients in the Freehold, New Jersey, area to meet their financial planning needs. As a Certified Financial Planner (CFP) at New Century Planning, he focuses on retirement income planning, as well as estate administration, regularly assisting his clients with legacy and estate planning. He also advises them on health and disability insurance, including Medicare, Medicaid, and Medicare Supplement Plans. Mr. Ryerson’s many years helping his clients navigate the complexities of retirement planning gave him a deeper understanding of the healthcare costs that retirees face. In 2013, he drew upon this knowledge to co-author the book What You Don’t Know About Retirement Will Hurt You. Outside of his work at New Century Planning, Robert M. Ryerson is a regular fixture at workshops and seminars on retirement. He has delivered several keynote speeches on the often-confusing topic of required minimum distributions. Mr. Ryerson continues to share his financial expertise as a facilitator of online courses for Certified Public Accountants through The Society for Financial Awareness. In the early 2010s, Mr. Ryerson became concerned about the threat of identity theft after noting the many cybersecurity breaches suffered by major companies. He became a Certified Identity Theft Risk Management Specialist (CITRMS) in 2014. He has since taught identity theft recovery courses at local community colleges. Mr. Ryerson also wrote a book on the topic entitled What’s the Deal with Identity Theft: A Plain English Look at Our Fastest Growing Crime. A graduate of Rutgers University with a degree in economics, Mr. Ryerson began his career in the financial services industry as a stockbroker. He obtained his CFP designation in 1991 and began working as an independent financial planner a few years later. In addition, he is a notary public.

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