Hello all! This month’s article is to share a strategic opportunity. Congress is going after the largest IRAs. The proposals in Congress might not become law, but our clients are hearing about them and want to hear from us on planning moves they could make to be better prepared. Congress has set its sights on mega-IRA balances, in large part due to the recent reports about a five billion dollar Roth IRA. But some of these proposals will impact many other clients with smaller individual retirement accounts and Roth IRAs.

Now for the provisions that can affect many more of our clients. The proposals include an all-out ban on back-door Roth IRAs and mega-back-door Roth IRAs (from company plans), regardless of income level, so this means everyone.

If you have been taking advantage of these provisions, especially the lucrative mega-back-door Roth, which can allow up to $58,000 this year to be contributed to after-tax plan accounts and converted to Roth IRAs, generally tax-free, this may be your last chance. So, make sure you get these done before year-end. The proposed ban would be effective after this year, like the other provisions mentioned above.

If you placed funds in a traditional IRA to get the tax deduction and tax differed growth. The consensus is that, regardless of what we are hearing from DC, taxes will likely go up. Yes, even for the middle class. The Fed is spending unprecedented trillions, borrowing money from other countries and printing more. Add to that, closing loopholes like Roth conversions, it may be a good idea to move a portion of your Traditional IRAs to Roth IRAs while the tax brackets are relatively low and may not get back to where we are now for many years. This move is not the right decision for everyone. There are a lot of deciding factors.

Is shifting assets from a Traditional IRA to a Roth IRA right for your planning? Our advisors can help.

Give us a call at 877-220-1089