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Maximizing Retirement Savings: Roth Conversions and 401(k) Strategies

About this Episode

In this episode of “The Planning Mindset Podcast,” we welcome back Rick Plum, CFP, from Lucia Capital Group, to shed light on the advantages of Roth Conversions and 401(k) strategies.

This episode focuses on the strategic process of converting a traditional IRA to a Roth IRA, a move that can establish tax-free income for your retirement. Rick will provide a clear understanding of the benefits and circumstances where a Roth Conversion makes sense, addressing common misconceptions and answering questions you might have overlooked.

Furthermore, we’ll discuss the often-overlooked option of contributing to a Roth 401(k) through your employer. Rick’s insights into the benefits of this approach may inspire you to reconsider your current retirement plan and consult with your employer about available options.

Additionally, we’ll explore strategies to maximize contributions to your 401(k) or SEP plans, helping to ensure you’re making the most of these retirement savings vehicles.

Tune into this informative episode of “The Planning Mindset Podcast” to gain valuable knowledge on year-end and long-term retirement planning strategies. Rick’s expertise will guide you through these complex decisions, helping you fortify a financially sound retirement.

Important Information:

The information provided should not be considered specific tax, legal, or investment advice and is not specific to any individual’s personal circumstances. 

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

IRA withdrawals will be taxed at ordinary income rates. Withdrawals prior to age 59½ may also be subject to a 10% penalty tax.

Roth IRA distributions of principal from a Roth IRA are tax-free; however, any earnings will be taxed at ordinary income rates and a 10% penalty tax will apply if withdrawn prior to age 59½ or within five years of the date the Roth IRA was established, whichever is longer.

Jeanine Beratta and Rick Plum are registered representatives with, and securities and advisory services offered through LPL Financial, a registered investment advisor and member FINRA/SIPC. The investment professionals are affiliated with LPL Financial and are conducting business using the names Nexus Financial and Lucia Capital Group, separate entities from LPL Financial. LPL ART-507376 (11/23)

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