Bay Area Retirement Planning Services: Tax Free Roth IRA Conversions

Filed in CPA Blog by on December 29, 2014
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Retirement planning is one of our most important functions as a top San Francisco accounting firm. Our accountants are experts at moving the numbers around, to minimize the taxes of today and to maximize your income when you retire tomorrow. This month’s San Francisco tax tips newsletter has a very informative article on Roth IRAs. As you may or may not know a Roth IRA uses post-tax money to grow over time and in that way to avoid taxes in the future. You essentially pay taxes at today’s rate, and avoid taxes tomorrow.

Bay Area Retirement PlanningThis is to be contrasted with more traditional retirement strategies, in which you and or your employer contribute pretax dollars, thereby avoiding taxes today, and paying the taxes when you pull the money out during retirement. The advantage here is that the money can grow tax free.

Getting Good Advice on Retirement Planning: Speak with a Bay Area Retirement Expert

Now here is where it can get complicated. Many employers will match employee contributions up to a certain point, and then the employee can also contribute post-tax dollars to the retirement plan. Now, if you are quitting your employer, and you want to switch your money over to an IRA, at that point you have a mixture of pre-and post-tax monies.

The skill, therefore, is to transfer and keep the monies in the correct accounting bucket. If you have this sort of a problem, or you need advice on how to maximize your retirement monies and minimize today’s taxes, of course a consultation with one of our top rated San Francisco bay area accountants is in order. Providing retirement planning services for Bay Area customers is one of the many areas in which our practice is growing. So feel free to reach out!

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