Carlson Capital Management works with many clients each year to implement a Roth IRA conversion strategy in which a portion of their tax deferred accounts (i.e. 401(k), IRA) are converted to a Roth IRA. Generally speaking, the long-term benefits of a conversion strategy are measured by comparing the amount of taxes paid today upon conversion versus the taxes avoided in the future on all of the investment earnings and growth accruing after the conversion. Many will avoid paying the taxes today on ... [Continue Reading]
Articles and resources related to 401(k) Plans.
With many employer-based retirement plans (i.e. 401(k) or 403(b) plans) now offering a choice between making contributions into a Roth or a Traditional option, a conversation we frequently have with clients centers on the difference between contributing to one versus the other. As with most financial and tax planning questions, the answer depends a great deal on your personal situation, but there are several factors that are generally the most important to consider in deciding if a Roth is a ... [Continue Reading]
While the 2016 defined contribution plan limits for 401(k) plans remain unchanged as compared to 2015, participants should now give extra consideration to making additional after-tax contributions (if allowed by the plan) due to recent changes in tax regulations. Under IRS Notice 2014-54, the IRS has agreed that a plan participant can now directly roll over pre-tax account balances into a Traditional IRA account, and after-tax account balances into a Roth IRA account. What this means is that ... [Continue Reading]