Trending...
- Ascent Solar Technologies Enters Collaborative Agreement Notice with NASA to Advance Development of Thin-Film PV Power Beaming Capabilities: ASTI - 118
- Fact check: Claims swirling on California gas prices - 109
- Google AI Quietly Corrects the Record on Republic of Aquitaine's Legal Sovereignty
Financial Consultant Steve Sexton Shares the Perks and Pitfalls of a ROTH Conversion
SAN DIEGO - Californer -- With the current administration discussing possible tax increases, many Americans may be looking into ROTH IRA conversions as an option to possibly minimize taxes. Steve Sexton, financial consultant and CEO of Sexton Advisory Group in San Diego, California, is sharing the upsides, the downsides, and the top tips to know for those considering converting an IRA into a ROTH IRA.
1. You may end up paying tax on a higher conversion. According to Sexton, adding income during a ROTH conversion could push you into a higher tax bracket in the short-term.
2. You may receive a Medicare surcharge. "If you are receiving Medicare and your income goes above $176,000, you might be hit with a Medicare surcharge," explains Sexton. "You could wind up paying tax on 85% of your Social Security Income at a higher tax bracket."
3. Know the five-year rule. The deposit into a ROTH IRA has already been taxed, but the income that deposit generates is taxable for 5 year after the deposit.
More on The Californer
4. You must be 59 1/2 -years old in order to take out money tax-free. "If you are younger than 59.5 years old, you'll be faced with a 10% surcharge should you want to withdraw any funds," says Sexton.
5. Go for the "sweet spot." Sexton reveals most financial consultants agree that individuals between the age of retirement and the time you must take your required minimum distribution (72-years old) seems to be the "sweet spot" for embarking on a ROTH IRA conversion.
Above all, Sexton recommends speaking with a trusted CPA to truly understand the taxable impact of a ROTH conversion. "There are many advantages to converting your IRA to a ROTH. However, there are also a few key pitfalls and trapdoors, so it is essential you work with a financial professional who can help navigate these complicated waters," advises Sexton.
For more information on Sexton Advisory Group, please visit https://www.sextonadvisorygroup.com/
1. You may end up paying tax on a higher conversion. According to Sexton, adding income during a ROTH conversion could push you into a higher tax bracket in the short-term.
2. You may receive a Medicare surcharge. "If you are receiving Medicare and your income goes above $176,000, you might be hit with a Medicare surcharge," explains Sexton. "You could wind up paying tax on 85% of your Social Security Income at a higher tax bracket."
3. Know the five-year rule. The deposit into a ROTH IRA has already been taxed, but the income that deposit generates is taxable for 5 year after the deposit.
More on The Californer
- Long Beach Airport Named Number Two Airport in Nation by The Washington Post
- Dedeaux Properties Begins Construction on Truck Terminal and Industrial Outdoor Storage Facility
- Michael Reafsnyder opens solo exhibition at Scott Richards Contemporary Art in San Francisco
- Valley Sleep Therapy Expands to Prescott with New Location at Crossings Road
- Live Courageously Hosts Ann-Marie Murrell, Author, Journalist, Former Political Commentator
4. You must be 59 1/2 -years old in order to take out money tax-free. "If you are younger than 59.5 years old, you'll be faced with a 10% surcharge should you want to withdraw any funds," says Sexton.
5. Go for the "sweet spot." Sexton reveals most financial consultants agree that individuals between the age of retirement and the time you must take your required minimum distribution (72-years old) seems to be the "sweet spot" for embarking on a ROTH IRA conversion.
Above all, Sexton recommends speaking with a trusted CPA to truly understand the taxable impact of a ROTH conversion. "There are many advantages to converting your IRA to a ROTH. However, there are also a few key pitfalls and trapdoors, so it is essential you work with a financial professional who can help navigate these complicated waters," advises Sexton.
For more information on Sexton Advisory Group, please visit https://www.sextonadvisorygroup.com/
Source: Columbia Allergy
Filed Under: Financial
0 Comments
Latest on The Californer
- Duplitech Expands Manila Operations with New Office
- Hire Virtue Announces Executive Sponsorship Opportunity for Houston Hiring Blitz & Job Fair on August 6, 2025
- National Initiative Equips 1,000 Nonprofits with Business and Tech Skills Amid Job Corps Closure
- Orion Metal Exchange Launches Platinum Bonus Program
- Official Launch Of 'The Ambony' Marks A New Era In Sophisticated Digital Society Platform
- Inked & Maxim Model Teisha Mechetti Turns Heads—And Builds Community Impact
- California: TOMORROW: Make America Rake Again: Governor Newsom to make announcement on new wildfire prevention strategy targeting federal lands
- California: TODAY: Governor Newsom to sign historic bills to create more housing and infrastructure – faster than ever before
- Can This Simple Test Predict How Long You'll Live?
- AI Performs Virtual Tissue Staining at Super-Resolution
- Online Distribution of the Summer 2025 Diamond Certified Directory Update Begins
- California: Governor Newsom proclaims Immigrant Heritage Month 2025
- California: Department of Defense agrees: it's time for Trump's militarization of Los Angeles to end
- Long Beach: City Launches Internet Service Enrollment Line
- Von Rock Law Founder Deidre Von Rock Named Super Lawyer for 2025
- California: Governor Newsom extends emergency short-term housing protections in Los Angeles
- Von Rock Law Named SFGate's Best Probate and Estate Attorney in 2025
- Long Beach to Conduct Annual Summer Recess for City Council Meetings During July
- Plan to Launch Silo Technologies' Cybersecurity Pilot Program for Ultimate Nationwide Deployment via Exclusive Partnership: Stock Symbol: BULT
- Robert Michael & Co. Real Estate Team Celebrates Industry Recognition and Showcases Premier Central Florida Listings