Question

401k conversion to Roth

Forum|Forum|4 years ago
September 9, 2021
1 reply
0 views

Everyone is talking about this but I just don’t understand where it makes sense for me to do, unless the idea is to do it over time. I have less than $500k in 401ks and I am 67. My only income is social security. What makes sense for me to do?

AdamNe

Hello, @Shearl

The perceived tax benefit to Roth conversions is that you will pay less in taxes now than you might pay later when you withdraw the money. In other words, you believe your individual tax rate may be higher when you are withdrawing the 401k money than it is today.

So, yes, you can convert however much of your 401k you would like to Roth each year, knowing that the conversion amount will be taxed at the current tax rates. Then, when you withdraw it from the Roth, you pay no taxes (according to current law).

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"