Roth IRAs can be a good way to help a client supplement their retirement income with tax-free distributions. One of the main conditions is that the account has been in place for five years and the account’s owner is at least 59 ½ years of age. The IRS has ruled on two tax-efficient paths towards building up Roth IRAs. It issued Notice 2014-54 that according to Natalie Choate, and attorney with Boston law firm Nutter McClennen & Fish, “explained how participants in an employer’s qualified retirement plan can distribute after-tax money to a Roth IRA, without owing any income tax.” The IRS also issued another Revenue Ruling that dealt with money that flowed from an IRA into a company retirement plan.
See Donald Jay Korn, Smart Strategies for Tax-Free Roth IRA Conversions, Financial Planning, July 13, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
