As more and more conversations come up regarding future increases to tax rates, many people are wondering, is this the right time to convert a Traditional IRA to a Roth IRA?
A number of factors in 2020 have created an environment that may make it advantageous to consider converting. The steps taken by the U.S. government to combat the COVID-19 outbreak have altered the landscape for retirement assets and how they should be allocated.
Today, IRAs are one of the primary vehicles that Americans use to fund their retirement. In fact, 43.9 million households held at least one IRA in 2017, with 35.1 million households holding Traditional IRAs and 24.9 million holding Roth IRAs, and some households holding both [Investment Company Institute]. Additionally, due to changes in the tax laws of 2010, there are no age limits or income requirements to be able to convert a Traditional IRA to a Roth IRA, but keep in mind you will have a tax liability on the amount that you convert.