The article discusses the advantages of rolling over a traditional 401(k) into a Roth IRA, particularly for individuals who are leaving a job. It highlights the tax benefits of a Roth IRA, where gains are tax-free upon withdrawal, compared to traditional IRAs that tax gains only upon withdrawal. It advises consulting with tax professionals to navigate the tax implications of such a conversion and emphasizes the importance of actively managing retirement savings across accounts rather than leaving them unattended in former employer plans.
Roth IRAs provide tax-free growth and may be beneficial compared to traditional retirement accounts, despite potential near-term tax liabilities during conversions.
Converting a 401(k) to a Roth IRA is advisable for many holding tax-free growth potential but requires careful planning due to immediate tax liabilities.
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