I would like to convert IRA to a Roth IRA, Does Fidelity have any educational info on this process?
Here’s a summary of the main problem and solutions discussed:
- Main Problem: The user is interested in converting an IRA and a traditional 401k to a Roth IRA but seeks guidance on the process, potential tax implications, and how to avoid moving into a higher tax bracket.
- Solution: Fidelity provides articles outlining the advantages and disadvantages of Roth conversions to help the user understand the process better.
- Solution: The user is advised to consult with a tax professional for personalized tax-related questions and concerns regarding the conversions.
- Solution: Fidelity’s online resource library includes articles, videos, and live events that can further assist the user with their inquiries.
- Additional Tip: Users suggest using tax software, like Turbo Tax, to project tax implications of conversions and to regularly check for accuracy in tax calculations throughout the year.
These steps can help the user navigate their Roth conversion strategy effectively.
Here’s the full thread
I am 63 years old, I would like to convert some money from an IRA to a Roth IRA and I would like to convert a traditional 401k to a Roth IRA. Does fidelity have any educational materials that can assist me with this process? I am looking for Advantages, Disadvantages, what to lookout for? Any gotchas? Can I wait until I perform my taxes to do a Roth Conversion for 2024 to ensure I don’t get into the next tax bracket?
Hello there, and thank you for reaching out, @jce. I’ll be happy to help you.
First, let me offer you a few articles about Roth conversions so you can understand the pros and cons.
Is a Roth IRA conversion right for you?: https://www.fidelity.com/viewpoints/wealth-management/insights/roth-ira-conversion
Roth IRA conversion: 7 things to know: https://www.fidelity.com/viewpoints/retirement/roth-ira-conversion-after-50
If you decide a Roth conversion is right for you, you can get started below.
Convert an account to a Roth IRA: https://www.fidelity.com/retirement-ira/roth-conversion-checklists 🟢
We also recommend speaking to a tax professional to answer any tax-related questions you have. 🟢
@FidelityShawn, Thank you for your quick response.
@FidelityShawn I will read the articals tonight. Thanks again.
You are most welcome, @jce. “Learn,” our online resource library, is filled with not only an extensive collection of articles, but you can watch on-demand videos and even attend live events. It’s a great place for answers, but feel free to reach out to us any time you need us. We’re happy to help! 🟢
I’ve been converting on my IRA to my Roth for the last 5 years. Just with a mindfulness to the impact to my tax burden as I do it how it might affect which tax bracket I’m in. I also focus on stocks that are the most down in price from when I originally bought them, so much so, that my IRA no longer has any stocks left that are in the RED from their original purchase price. 5 years later, My Rother is not twice the size of of my iRA , when I started it was half the size of my IRA.
@Stimpy It sounds like you did a good job doing your conversions. Congrats. It is nice to have a larger Tax free bucket that is growing tax free also. I have 2 years (2024 and 2025) to convert as much as I can since the current tax rates are going to expire in 2026. I want to convert as much as I can while the tax rates are lower. I don’t want to put myself in a higher tax bracket because of the conversions, and I will have to see how much of a tax bill it is going to cost me to do that. I am just getting started, but if you have any tips, I will be glad to hear them.
I file my taxes using Turbo Tax. I’m currently retired and pay my taxes via “estimated taxes”.
To determine the impact on my taxes caused by my Roth conversions, I use last years Turbo Tax, 2023 in this case, to develop a “PROJECTED” tax for the current year. I create a separate line item under pensions for the Roth conversion amount and put in that in to see the impact on the expected amount of taxes owed.
I try and keep up on all the other things that might have changed from the previous year, increases in pension amounts or rental income etc. etc.
striving to make it as accurate as possible and revisiting it multiple times through out the year.
This year already I’ve found a couple of things I had missed earlier that made the total to be off by a couple of thousand dollars. Always double and triple check your math, both in your tax software and any spreadsheets you might use.
Don’t pre-pay taxes from the taxable accounts and don’t transfer more from a taxable account to your Roth than your are willing/ able to pay the taxes on.
At least, this is how I have handled things these last 5 years.