At first glance, the ROTH IRA is just for single people earning less than $122,000 and married couples earning greater than $177,000. Some of you may not fit into this category because you earned too much money. Regardless, there are ROTHs for almost all of us.
Old 401k. If retirement is still a distant goal, I do think it is worth to convert at least a portion of an old 401k to a ROTH. The rationale is that taxes will most likely be higher in years to come and why not avoid them? If you can, convert in a year where your income is lower. Not every accountant agrees with me (that’s ok!) so check with yours. Mine did and she is very conservative – by the books!
Teenager Earning Income. If you have a teenager in your house, encourage them strongly to put as much of their earned income into a ROTH IRA. Imagine what $1,000 saved at age 16 for a few years will be 50 years later (more than $30,000)!
ROTH 401k. I’m seeing more and more of these at my clients’ workplaces. You can choose just a portion of your 401k for this plan. In this case, your income doesn’t matter. If your company doesn’t offer one, ask your HR department to consider starting a ROTH 401k.
These are just a few points. To discuss it further for your situation, call us or send us an email for an independent unbiased money appointment.
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