Roth conversions: When the benefits may not justify the effort, according to a leading advisor
Understanding Roth IRA Conversions Converting to a Roth individual retirement account (IRA) can potentially decrease lifetime taxes, but this approach may not suit everyone. The decision becomes even more intricate with recent changes stemming from President Donald Trump’s major legislation and other developments. Essentially, Roth conversions involve transferring funds from a traditional IRA (either pretax […]
The Mega Backdoor Roth: A Way for Tech Workers to Contribute $34,000 Each Year to a 401(k) Without Paying Taxes
A Look at the Backdoor Roth Strategy for 401(k) Contributions A 56-year-old software engineer, who has accrued $1.6 million in her 401(k), recently sought advice on r/financialindependent about how to handle her plan’s “after-tax and Roth conversion” options, aside from the typical $24,500 deferral. While she’s taken full advantage of her regular contributions for 20 […]
Retirees Have an 11-Year Opportunity to Switch to a Roth at Low Rates, but On Average Convert Nothing.
quick read Retirees have around 11 years before required minimum distributions (RMDs) kick in at age 75, during which they can convert to a Roth IRA at a 12% federal tax rate. Interestingly, the average retiree actually converts nothing during this time. This can often be linked to a low personal savings rate of 3.9%, […]
The Argument for Keeping VYM in Your Roth IRA
If you hold Vanguard High Dividend Yield Index Fund ETF Stocks (NYSEARCA:VYM) in taxable accounts, you might find that every December, the distribution check comes with a reminder from the IRS. So, if you’re in the 24% federal tax bracket and your portfolio generates $20,000 in dividends, you could be sending $4,800 to the government […]
A 58-Year-Old With $2.2 Million in a 401(k) Has Five Years to Complete a Roth Conversion That Could Save $315,000 in Taxes Over a Lifetime
Quick Read Waiting until 63 to convert $80,000 a year can lead to a reduction in tax brackets from 17% to 24%, ultimately saving around $315,000 by age 73. If you aim to convert, it’s wise to build a reserve of about $150,000 in outside savings to handle the conversion tax without touching your $2.2 […]
The 401(k) Mega Backdoor Roth Method a Tech Employee Used to Accumulate $750,000 in Roth Savings in Six Years
Quick Read A Meta engineer earning $200,000 can convert their $36,250 annual after-tax 401(k) contributions into a Roth and potentially accumulate $750,000 tax-free by the age of 36. Before engaging in a mega backdoor strategy, ensure your Meta plan permits after-tax contributions and in-plan Roth conversions. Wondering where you stand with retirement? SmartAsset offers free […]
Roth 401(k) Accounts No Longer Necessitate RMDs — How This Affects Your Approach
Roth 401(k) Plans Are Growing in Popularity It wasn’t too long ago that locating a Roth 401(k) might have felt like searching for a needle in a haystack. Nowadays, though, many employer-sponsored 401(k) plans are incorporating these Roth saving options. And honestly, Roth 401(k)s are looking much more appealing than they used to. Previously, one […]
Financial advisor fully funds their Roth IRA at the start of each year: It’s ‘essential for me’
Investing Early: Charly Stoever’s Strategy Even though it’s just February, Charly Stoever has already made a big dent in their investment plans for the year. As the founder of Traveler Charlie Money Coaching, Stoever kicks off each year by maxing out contributions to their Roth Individual Retirement Account. This means they’ve already hit the 2026 […]
Roth IRA conversions become more popular as Generation X gets older. Should you make the switch?
February 13, 2026, 5:07 a.m. ET A Look at Roth Conversions and Retirement Savings A Roth conversion is essentially moving assets from a traditional retirement account, like an IRA or 401(k), into a Roth IRA. The catch? You pay income tax on the amount you convert in that tax year. However, the upside is that […]
5 important reasons to avoid switching to a Roth IRA in 2026. It may cause more harm than benefit without your awareness.
Considering a Roth IRA Conversion? Here’s What to Keep in Mind Switching a traditional Individual Retirement Arrangement (IRA) or 401(k) to a Roth IRA certainly seems financially savvy at first glance. The idea is to take money from your retirement account, pay some taxes upfront, invest it in a Roth IRA, and then enjoy tax-free […]