Roth Rollover

Are you thinking about participating in a Roth Rollover? If so, you should consider getting the help of insurance and retirement fund experts at Best Life Insurance. If you already have one or more 401(k) accounts set up, that’s great! Our team can answer questions you have about rolling your retirement funds into a Roth IRA account.

This is a great step to make, especially if you believe that the tax rate when you’re retiring will be high. Roth IRA accounts offer a unique tax-free opportunity, and that is why our insurance agents recommend it. Learn about Roth IRA accounts and make the decision today to participate in a Roth Rollover.

A Roth IRA is an individual retirement account. It is usually funded by contributions made by you and your employer. You put in a part of your salary, and your employer can match what you put in or come up with their own contribution amount.

With this account, the money you put in is taxed, but it grows in the account tax free. It is important to realize that any funds you place into a Roth IRA are not pre-tax dollars. However, they do grow tax-free within the account, and when you reach the required age, you are able to withdraw them without paying taxes. Taxes rates can increase between now and the time you retire, so this is certainly an advantage.

If you create a Roth account with us, you have the privilege of a built-in floor, and it participates in market gains. This means you have a settled beginning amount that is not negatively affected by the market. And if the market has any gains and increases, your account experiences those as well.

With a Roth account, you start contributing anytime if you have a steady income. In addition, you can continue to contribute until the age of 72 where you need to take out the minimum distribution amount. If you retire at the age of 59 ½ or 60, you can start taking money out of your account. 59 ½ is the minimum age that one can start distribution.

If you are thinking about changing to a Roth IRA account, this is a great choice.

If you have a traditional IRA account, you can turn it into a Roth IRA account. Most retirement accounts can be turned into Roth IRA. This is what we see a lot of clients doing, and it honestly pays off in the end. This is because of the tax aspect of the account.

So, when it comes to completing a Roth Rollover, the process can be quite simple once you already have a traditional IRA account. All it takes is changing that account to a Roth account at the same insurance agency or opening a new Roth IRA account and have it transferred there.

The Process

For example, let’s say you had a traditional IRA account at a different insurance company. This account was started with your former employer, but you have changed companies and are working somewhere else. They also set up a retirement account for you, let’s say in the form of a traditional IRA 401K account.

So, now you have two traditional IRA accounts that you are making steady contributions to. If you want to merge the two accounts, you can do so through a rollover process. All that you need to do is contact us at Best Life Insurance.

At this point, you have the choice of doing a trustee-to-trustee rollover or indirect rollover. With a trustee-to-trustee account, the assets from the other accounts are sent directly to this new one.

By doing an indirect rollover, you get a check of the total sum from the previous traditional IRA account. You have 60 days to deposit the check into a new retirement account. Your new account, in this case, would be the Roth IRA account.

As stated before, traditional IRA and Roth IRA retirement accounts are quite similar. But why do we see many clients go through the process of turning their traditional IRA accounts into Roth accounts?

This is because of the way that the account is taxed, or we should say not taxed. With a traditional IRA, you may be aware that the contributions made are from pre-taxed dollars. It is the opposite with a Roth IRA; taxes are taken out of the money you put into the account.

When a withdraw is done from a traditional IRA account, the money removed is taxed at the tax rate of that time. This means that some of the money you’ve been contributing goes back to the government. With a Roth IRA account, when a withdraw is made, that money is not taxed. This means you get to keep more of the money that you contributed and earned interest on.

For this very reason, we see a lot of clients come in and ask for a Roth Rollover. For assistance creating a Roth rollover account, or to discuss the pros and cons of doing so, contact the professional insurance agents at Best Life Insurance in Houston!