Roth individual retirement account conversions are up in 2024 — but there are key things to know before converting funds, experts say.
There was a 44% year-over-year increase in the number of Roth conversions during the first quarter of 2024, according to data from Fidelity Investments.
Roth conversions transfer pretax or nondeductible individual retirement account funds to a Roth IRA, which provides future tax-free growth.
However, "it isn't a slam dunk for everyone" because it takes time for tax-free growth to exceed your upfront tax bill, said Marianela Collado, a certified financial planner and CEO of Tobias Financial Advisors in Plantation, Florida.
Here’s how much you can saveInvestors need "sufficient assets" outside of retirement accounts to cover the upfront tax bill, warned Collado, who is also a certified public accountant.
Persons:
Roth, Marianela Collado, Collado, You'll
Organizations:
Fidelity Investments, Roth IRA, Financial, Finance, Medicare
Locations:
Plantation , Florida