Don’t overlook this tax-planning sweet spot

In contrast, withdrawals from Roth IRAs are generally tax-free.

They also don’t have required minimum distributions. In fact, some people simply let the balances accumulate over their lifetime and pass the Roth IRA on to heirs (who also enjoy the tax-free status, although they must meet other rules).

You also can stretch a Roth IRA conversion over several years, which can minimize the tax sting and help ensure the switch doesn’t push you into a higher tax bracket in any given year.

However, before you get the wheels rolling, there are some aspects of the conversion to consider.

For starters, you need to make sure you have enough cash available to pay the taxes due. Also, new tax rules that took effect this year eliminate the option to change your mind for conversion done in 2018 or later.

Additionally, the Roth IRA generally must remain untapped for at least five years after the conversion for you to take advantage of completely tax-free withdrawals.

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