IRA Conversion to a Roth IRA | Planning Opportunity

We are Michigan estate planning lawyers, not financial planners, that said there is a great opportunity that is on our financial planning/estate planning radar.  That is the opportunity to convert your IRA’s to Roth IRA’s.

The original idea behind IRA’s was to put money away while you are in a higher tax bracket, let it grow and compound tax deferred, then take the money out while you are in a lower tax bracket.  Well, many estate planning attorneys are reporting that their retired clients aren’t necessarily in that lower tax bracket.  Maybe the idea of defer, defer, defer is not true.  In that case the taxes on your IRA’s may be a tax bomb just waiting to go off.

So the opportunity now is that with this economic discount we are facing thanks to the economy, now might be the time to move funds from the IRA to a Roth IRA.  That way, once this economic discount period is over, the retirement account will be tax free with no required minimum distributions (RMD’s).

This is just one area where estate planning and financial planning overlap.  As Michigan estate planning attorneys, we look at any opportunity to provide discounts and tax savings to our  clients.

-Christopher J. Berry, Esq.
Bloomfield Hills Estate Planning Lawyer