08-26-2021, 10:59 AM
(08-26-2021, 10:29 AM)ken-do-nim Wrote: If I'm not mistaken, if you move pre-tax 401k funds into a ROTH IRA, you have to immediately pay taxes on them. As Fenders said, might be worth doing if you are in a low tax bracket this year.You aren't mistaken. The taxes will be paid at some point. If you think tax rates will be at least a little higher in the future a ROTH makes sense to me for some of your port. My attraction is it's a tax free withdrawal at some point in the future and you get to pick when, and build the tax free balance in the meantime. After retirement a Roth is just another tool. If you end up willing it to heirs they have tax free income, though it's my understanding they will have to withdraw it much like a tax free annuity. They won't let you sit on it for another 40 years untouched. GOV wants your ROTH to go away at some point. IMO it does require professional advice so you can sort through the what if assumptions.