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Money Matters: How to Take Advantage of a Market Downturn to Initiate Roth IRA Conversion

Published: Jun. 8, 2022 at 7:45 AM EDT
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COLUMBIA, S.C. (WIS) - You can’t time the market, but you can find out how to reduce long term taxes during this time. Why is now a good time for a Roth IRA conversion?

It may be an ideal time to start considering a Roth conversion. You have a window of time to convert assets from on old IRA to a tax-free account at a discounted rate. Josh will elaborate more on what a Roth IRA is.

Is there a catch to converting to a Roth IRA? And what should you be aware of before making that change?

You will want to make sure that you have enough money outside of your IRA or your old 401k because you will have to pay the taxes on the Roth.

Is there data showing that more people are doing a Roth conversion right now?

We have seen a rise in Roth conversions. Fidelity has seen an 18% increase in Q1 compared to last year.

If you have a traditional 401k plan, can you convert that to a Roth?

It has to be former employers because you retired or got a different job.  Make sure you check with the plan rules to know when and how you can make that conversion.

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