Part 3/7:

The Roth Conversion Discussion

Dave’s primary question pertained to whether he should consider converting his traditional 401(k) into a Roth IRA. The financial host explained that transitioning to a Roth would involve paying taxes on the amount converted, but it opens up the potential for tax-free growth thereafter.

As per the information Dave received, it is recommended to start this conversion before he reaches the age of 72, when Required Minimum Distributions (RMDs) kick in, requiring withdrawals from traditional retirement accounts and thus an unavoidable taxable event.

Advantages of Roth IRA Conversions

The host articulated the main benefits of converting to a Roth IRA: