Wall Street Journal: Is It Time to Convert to a Roth 401(k)?

Monday, January 07, 2013

Compiled by Jared Trexler

The new tax provisions within the American Taxpayer Relief Act of 2012 make some subtle, if not substantial, changes to income tax rates, the top estate tax rate, capital gains rates for upper-income earners and more.

Yet, from a retirement planning standpoint, the biggest provision may be the change to in-plan Roth conversions.  The Wall Street Journal’s Kelly Greene examined this “little-noticed provision in the new tax law (that) gives many more workers a chance to stockpile tax-free retirement savings.”

From the government’s standpoint, the procedural change to in-plan Roth conversions is a revenue raising measure, but from a retirement planning standpoint, some financial planners are calling the move a “bonanza for investors, especially younger workers, while others have deemed it a dangerous trap.”

CLICK HERE to read Greene’s entire piece, including expert analysis from Ed Slott and Company IRA Technical Consultant Jeffrey Levine and four Ed Slott IRA Advisors, Todd Schneider, Adam Wolf, Jeff Cutter and Michael Schwartz.

And it case you missed it, here are links to other important initial explanations of the new 2013 tax laws.

QCDs for 2012? Yes They Are Now Available
Taxpayer Relief Act of 2012: 5 Key Retirement Planning Points

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