Roth Conversion

At Hudson Agency we help you decide whether converting retirement savings to a Roth account could lower the taxes you pay in retirement.

What Is a Roth Conversion?

A Roth conversion moves money from a pre-tax account — such as a traditional IRA or an old 401(k) — into a Roth IRA. You pay income tax on the amount you convert in the year you convert it.

After that, the money can grow tax-free, and qualified withdrawals in retirement are tax-free. Roth IRAs also have no required minimum distributions during the owner's lifetime.

Is a Roth Conversion Right for You?

A conversion is often worth a look if:

• You expect to be in the same or a higher tax bracket in retirement.
• You have a lower-income year — for example, between jobs or early in retirement.
• You can pay the conversion tax from savings rather than from the retirement account itself.
• You want to leave tax-free money to your heirs.

There are rules to plan around, including the five-year rule for converted amounts and how extra income in the conversion year can affect Medicare premiums and the taxes on Social Security benefits. Converting smaller amounts over several years can help manage the tax bill.

We will review your accounts and goals with you and coordinate with your tax professional. Book an appointment to get started.

Hudson Agency does not provide tax or legal advice. Please consult a qualified tax professional before converting.