![]() ![]() What makes Roth contributions unique is that they are made with after-tax dollars, but once held in that account (subject to certain restrictions ), the earnings that accumulate are not subject to tax, nor are the contributions, which are made with after-tax money. Individuals who expect to pay higher tax rates in the future may well want to pay taxes on their pre-tax savings (and earnings) now - and they may also want the flexibility to avoid the forced distribution (and taxation) of required minimum distributions (something Roths are not subject to). Thus, the need to roll money from the plan to an IRA is eliminated for those participants who want to leave money in a Roth account as long as possible under the law. 1, 2024, required minimum distribution (RMD) rules for qualified plans will be on a level playing field with Roth IRAs, with the Roth accounts excluded from the pre-death amounts used to calculate the RMD. ![]() Effective for distributions due after Jan. ![]() The driving force is Section 325 of SECURE 2.0. ![]() One much-discussed strategy is the Mega Backdoor Roth. In particular, I’ve seen a resurgence in Roth conversion questions. We’ve received numerous inquiries on the operational aspects of Roth provisions now that SECURE 2.0 expands the availability and benefits of Roth contributions in retirement plans. ![]()
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