My husband tried to convert his 401K to a roth conversion but was told he could not do the conversion since he is actively working. He could do that once he retires. Confused about this after watching this video.
I am currently contributing to a Roth 401K and I am doing an ( IPRR ) In plan Roth Rollover every year. Because currently I am in the 19% tax bracket. That 19% is for the state and federal combined.
Sorry I still not clear- so let say I have 400 in 401k-how much if not all can be converted to Roth IRA? And how about future contribution-is that going into the new roth? Regardless tax bracket, if the balance keeps growing with each year and the us you may pay more tax later on?
It’s company based. Some companies allow to convert directly from Traditional 401K to Roth 401K but some companies don’t allow to do it. It is easier to call company to verify it. It happened to me as my company doesn’t allow but my husband company can do it.
This is totally wrong. Majority of people are much better with pretax accounts because when you convert them to Roth, you pay marginal tax rates (in this example, 22%) whereas, after retirement, you only look at effective tax rates, which will be only 12%. Even when tax rates go up, still your effective tax rates will be only 15%. And even when your spouse dies first, still your effective tax rates won’t be higher (SS income cut by a half). Watch other videos (like the one below ) to find why most of people are better off with pretax accounts. Even $3 millions in your pretax accounts are still not taxed more. Don’t convert them. You will regret badly after retirement. ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-MHLzMXOg7Pk.htmlsi=6RqsftXdwytmX2Ls
correct me if im wrong, I believe it makes sense if you're farther away from retirement because rather than all of your money getting taxed during its compounding ( pre tax dollar contributions and gains), you would only have to pay taxes on current contributions and then moving forward, it compounds tax free.
