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finanCial foCus ®
When Is A Good Time For Roth Conversion?
By Sally Sima Stahl, Edward Jones
In life, you often get • Tax-free withdrawals—you put in after-tax dollars to too much money— a Roth IRA, unlike a traditional IRA,
second chances—and the a Roth IRA, so you can withdraw your contributions at has income limits. Also, a Roth IRA has only been around
same is true with investing. any time, free of taxes and penalties. And if you’ve had since 1998, so, in the previous years, you were limited to
To illustrate: You might not your account for at least five years and you’re at least a traditional IRA.
have been able to contribute 591⁄2, you can also withdraw your earnings free of taxes. You’ll want to consult with your tax advisor before
to a Roth IRA during your • No RMDs—With a traditional IRA, you’ll have to embarking on this conversion—but if it’s appropriate for
working years due to your start taking withdrawals — called required minimum your situation, you could find that owning a Roth IRA
income level, but you may distributions, or RMDs — when you turn 73, or 75 if can benefit you and your family for years to come.
get that opportunity as you you were born in 1960 or later. But there’s no RMD As you approach retirement, though, you might start
near retirement or even when requirement with a Roth IRA — you can essentially leave thinking of just how much you’d like to benefit from a
you are retired—through a the money intact as long as you like. Roth IRA.
Roth conversion. Timing also comes into play with the financial markets. This article was written by Edward Jones for use by
And you can do so by converting your traditional IRA to When the market is going through a decline, and the value your local Edward Jones Financial Advisor, Edward
a Roth. While this sounds simple, there’s a major caveat: of your traditional IRA drops, you could convert the Jones, Member SIPC.
taxes. You’ll be taxed on the amount in pre-tax dollars you same number of shares of the underlying investments and Edward Jones is a licensed insurance producer in
contributed to a traditional IRA and then converted to a receive a lower tax bill or convert more shares of these all states and Washington, D.C., through Edward D.
Roth IRA. (If you have both pre- and after-tax dollars in investments for what would have been the same tax bill. Jones & Co., L.P., and in California, New Mexico and
your traditional IRA, the taxable amount is based on the • Tax-free legacy for your heirs—When your heirs Massachusetts through Edward Jones Insurance Agency
percentage of pre-tax dollars.) inherit your Roth IRA, they can withdraw the contributions of California, L.L.C.; Edward Jones Insurance Agency of
Why is a Roth IRA desirable for some people? Here are without paying taxes or penalties, and if the account has New Mexico, L.L.C.; and Edward Jones Insurance Agency
the key benefits: been open for at least five years, they can also withdraw of Massachusetts, L.L.C.
If you have large amounts in a traditional IRA, the tax earnings tax-free. Edward Jones, its employees and financial advisors
bill on conversion can be significant. The key to potentially Finally, you could lower your tax bill in any given year cannot provide tax advice. You should consult your
lowering this tax bill is timing. Generally speaking, the by stretching out your Roth IRA conversions over several qualified tax advisor regarding your situation.
lower your income in a given year, the more favorable it is years, rather than doing it all at once. Contact us at (561) 748-7600, Sally Sima Stahl, CFP ,
®
for you to convert to a Roth IRA. So, for example, if you But even if you were aware of these advantages, you AAMS , 1851 W. Indiantown Road, Ste. 106, Jupiter, FL 33458.
™
have already retired, but have not started collecting RMDs, might not have been able to invest in a Roth IRA for
your income may be down. much of your life. For one thing, you might have earned
all abouT kids
Helping Disorganized,
Forgetful, And Scattered Adolescents
By Jim Forgan, Ph.D., Licensed School Psychologist
A parent described her for success this year and beyond. Are you tired of being Call (561) 625-4125 if you would like to sign up or if
eighth-grade son to me, your child’s only executive assistant and ready for your you need school neuropsychological testing to give you
“He has struggles following adolescent to hear about success skills from someone understanding and answers. Learn more at JimForgan.
multiple oral instructions other than yourself? com/executive.
at the same time. His
information retention in the
short term is challenging
especially for unpreferred
topics. He has completed
homework and forgot to
turn it in. He waits until the
last minute to start projects
or studying for exams. What a hot mess!”
This mom was describing her son’s executive
functioning weaknesses. The term executive functioning
encompasses our brain’s ability to manage different
systems such as planning, organizing, maintaining effort,
remembering, self-regulating, attending, and completing
tasks. School success depends, in part, on having strong
executive functioning skills. Executive functioning
weaknesses can cause smart kids to become scattered,
disorganized, and forgetful. These weaknesses might be
accompanied with ADHD or learning disabilities but can
also be stand-alone difficulties. Our executive functions
improve with age and fully mature in our late teen years
to early 20s. Thus, there’s hope for your student’s growth.
Executive functioning skills can be learned, practiced
and improved. This month I am offering an in-person
executive functioning course for students in grades 6
through 9. Your student can join us for three, 90-minute
sessions of fun, interactive activities to learn executive
functioning skills related to organization, planning, time
management, memory, and attention. The group size is
limited to 10 students.
We will use games, scenarios, and videos to illustrate
points and practice skills. Students receive written
handouts to keep which summarize the new skills. We
are approaching this mastermind course for teens using
a cognitive behavioral framework. That means that if
you can change your thinking and learn new skills, you
can change your behavior. Your student can learn skills