A $900,000 traditional 401(k) left to heirs yields roughly $684,000 after taxes, while a Roth passes the full $900,000 income-tax-free.
Heirs must empty inherited accounts within 10 years, potentially pushing a child earning $150,000 into the 32% or higher tax bracket.
Converting gradually during low-income retirement years keeps taxes in the 22 to 24 percent brackets and avoids Medicare surcharges above $218,000 in joint income.
The biggest 401k decisions tend to get made once and never revisited: when to roll it over, what to hold inside it, and when to start taking money out. That is exactly what the report: 401k & IRA Tips and Answers was created to address, and it is free today. Read more here. (Sponsor)
Picture a 66-year-old with $900,000 in a traditional 401(k) who has already decided the money goes to the adult children. The open question is whether to leave it alone or convert it to Roth first. That choice can change what the kids keep by six figures.
#traditional #free #medicare
Heirs must empty inherited accounts within 10 years, potentially pushing a child earning $150,000 into the 32% or higher tax bracket.
Converting gradually during low-income retirement years keeps taxes in the 22 to 24 percent brackets and avoids Medicare surcharges above $218,000 in joint income.
The biggest 401k decisions tend to get made once and never revisited: when to roll it over, what to hold inside it, and when to start taking money out. That is exactly what the report: 401k & IRA Tips and Answers was created to address, and it is free today. Read more here. (Sponsor)
Picture a 66-year-old with $900,000 in a traditional 401(k) who has already decided the money goes to the adult children. The open question is whether to leave it alone or convert it to Roth first. That choice can change what the kids keep by six figures.
#traditional #free #medicare
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