Second to your primary residence, the bulk of assets most individuals have saved come in the form of 401k savings. While most individuals believe these assets are “untouchable”, what if you had the ability to unlock the power of your 401k and reduce fees at the same time?
Did you know that more than 70% of all 401k plans allow for what is called an In-service rollover?
An in-service rollover is a way to roll your current employers 401k assets to an IRA, without closing the plan and still contributing to the plan, but at the same time, giving yourself the advantages of being able to utilize numerous other investment vehicles available to you rather than the limited choices offered by most traditional 401k plans.
In-service rollovers do have rules and restrictions; you may or may not be able to execute a transaction of this type, however, we wouldn’t know unless we explore the option. Though, having the ability to do this, when executed in conjunction with a properly designed income plan, could drastically change the landscape of your years in retirement.
Coupled with alternative strategies, it could be the difference between outliving your savings or building a legacy for your heirs or favorite charity.
What about taxes?
Do you really think you’ll be paying less in taxes when you retire? We are more than $21-trillion in debt as a country, with newly elected Congresswoman Alexandria Ocasio-Cortez having floated a “70% Wealth Tax” on earned dollars over $10-million.
“Tax experts consulted by the Washington Post say that a 70% on income over $10-million could theoretically bring in an additional $72-billion per year in taxes, or $720-billion over a decade” Money – 1-7-2019
Money points out it would be enough to pay for Bernie Sanders plan to provide tuition-free college, estimated cost $800-billion over 10 years. Politicians are suggesting ideas like this in an effort to raise money to PAY for further spending plans, not cut deficits and current debt.
What do you think will eventually pay down the national debt if anything? Our guess, higher taxes and an inflated, devalued currency top our thoughts.
So have you considered executing a Roth IRA conversion? Even if you’re making less in future years, based upon the spending habits and demographics of our current and future politicians, we find it difficult to draft a case for lower future taxes.
If you can’t stomach paying the taxes on a full Roth IRA conversion, have you considered a partial Roth conversion spreading the tax burden out over a few years, yet giving some of your money the opportunity to grow on a TAX FREE basis?
These strategies can save you years off your retirement if properly executed. You should be exploring these strategies and more in an effort to maximize and unlock the potential of your current savings.
We’d love to have a conversation.