Berks Barrister Fall 2018 - 13

Suppose, based on your tax advisor's long-term income tax
planning, you are advised to withdraw $40,000 from your IRA
this year. There are a couple of things you should consider.
First, you have the option to take your IRA withdrawal in
cash, pay the taxes and add the money to your personal account.
Another option is to convert this $40,000 from your IRA to a
Roth IRA. Doing so allows you to continue investing the money,
while also allowing any dividends and capital gains to accrue taxfree (assuming Roth IRA requirements are met). This may benefit
not only you, but also your beneficiaries.
Keep in mind, Roth IRA conversions no longer have income
restrictions.
Another consideration is how to maximize the value of assets
converted to your Roth IRA. Suppose the income tax on the
$40,000 conversion is $8,000. You have the option to withhold
$8,000 from conversion, meaning only $32,000 would go to the
Roth IRA (the $8,000 is paid directly to the IRS). Ideally, you
would pay the $8,000 income tax due from an external source.
Then, the entire $40,000 would be added to your Roth IRA.

Where Do I Start?

Most importantly, start TODAY! Paint a picture of when
you want to retire, where you want to live and how much
it will cost to fund this lifestyle. Then, you need to consider
whether you can afford to retire - a difficult calculation. You
must manage your resources for an entire lifetime which will
undoubtedly include financially difficult periods. The more you
plan and understand your situation, the more likely you are to
get through them.
All the best!!
Paul Marrella, J.D., CFP®, CLTC, is a wealth manager at
Marrella Financial Group LLC (an Independent Firm),
noted public speaker, author of What Now? The Widow's
Guide to Financial Independence, a member of the Berks
County Bar Association and a member of the Board of
Trustees of the Law Foundation of Berks County. Marrella
Financial Group, LLC is located at 1250 Broadcasting
Road, Suite 102, Wyomissing, PA 19610, (610) 655-9700,
with securities offered through Raymond James Financial
Services, Inc., Member FINRA/SIPC.

Editor's Note: The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. The
information provided in these materials does not constitute any legal, tax or accounting advice. Please consult with a qualified professional for this type of advice.
Any opinions are those of Paul Marrella and not necessarily those of Raymond James or of the Berks County Bar Association.

"Can I leave
behind a legacy
that will give him
enough security?"
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www.connorsinvestor.com

Fall 2018 | 13

Retirement

Roth IRA Conversions

Planning

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Berks Barrister Fall 2018

Table of Contents for the Digital Edition of Berks Barrister Fall 2018

Berks Barrister Fall 2018 - 1
Berks Barrister Fall 2018 - 2
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