Breaking Down Roth Conversions For Individual Investors

While many investors get understandably frustrated during market downswings, the savvy ones quickly take action. There are several ways you can take financial action to combat recessionary periods. However, if you have not considered a Roth Conversion yet, now just might be as good a time as any.

We encourage you to watch the following video of Larson Financial Group’s President, Colin Wiens, MBA, CFP®, as he breaks down these Roth Conversion topics and explains why now could be an ideal time to convert.

  1. IRA vs Roth IRA – What is different about the two? When does it make sense to pull your money out or put more in?
  2. Market is Down – Outlining why down market conditions could make for an opportunistic time to convert.
  3. Real Estate – How enhancing your Roth Conversion with real estate could lead to higher returns & discounted evaluations.

Highlights for:

You

  • A Roth IRA allows your earnings to grow tax free
  • If you believe your tax bracket will be higher in retirement, paying taxes at your current tax rate may be preferable
  • Qualified withdrawals from your Roth IRA are tax and penalty free
  • Larson Financial offers alternative investments placed within opportunity zones. This allows for discounted evaluations, which can lead to high returns over time
  • Not sure where to start? Contact your Larson Financial advisor and they will be happy to walk you through the process and provide greater detail on if a Roth Conversion is right for you
  • Don’t have an advisor? Book a meeting here

Your CPA/ Tax Preparer

  • LCM uses an independent, third-party accounting firm to complete all fund accounting, tax returns, and valuations
  • You will receive a Form 1099-R for the fair market value of the Roth conversion
  • The taxable amount of the conversion will need to be adjusted to the discounted value by your tax preparer
  • LCM will provide you with a tax packet that includes a discounted valuation letter and a copy of the valuation report
  • No unrelated business taxable income (UBTI) concerns because of C corporation structure
  • If you don’t have a tax preparer, reach out to your Larson financial advisor for referrals that will ensure proper reporting