Much has changed since penalty-free Roth conversions were inaugurated in 2010. Tax rates have gone up and down. The re-characterization provision went away. Heirs can no longer stretch out inherited Roth accounts over a lifetime. Medicare surcharges were expanded and began to adjust for inflation. The age to begin RMDs was pushed out to age 72 and the IRS changed the RMD divisor tables to further slow the pace of distribution.
These developments prompted our speaker, Professor Ed McQuarrie, to re-examine the rationale for Roth conversions. Join Professor McQuarrie to hear his research findings that exposed multiple flaws in conventional wisdom such as:
- Future tax rates need not be higher for a conversion to pay off;
- Nor is it all that helpful to pay the tax on conversion from outside funds;
- Nor are Roth conversions especially beneficial for top bracket taxpayers as compared to middle-class taxpayers;
- Rather, the greatest benefit accrues to taxpayers who can make the conversion partly in the zero percent tax bracket, i.e., during a year with no other taxable income:
- the role played by the mathematics of compounding in underwriting the success of Roth conversions.
*CE/CPE Eligible: 1 CE credits are available to subscribers with these designations: CFP, CLU, ChFC and RICP. CPA subscribers will earn 1 CPE credits.
Field of Study: Specialized Knowledge
Prerequisites: There are no prerequisites for this session.
Advanced Preparation: None
Program Level: Basic
Delivery Method: Group Internet Based
NASBA Approved
Financial Experts Network (Sponsor Id#: 145173) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.