“A Comparison of the Tax Efficiency of Decumulation Strategies” by Geisler, Harden, and Hulse was published in the March 2021 issue of the Journal of Financial Planning, and the research is invaluable to our profession. This article seeks to put that research in motion to better serve our clients.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for individualized tax advice. Please consult your tax advisor regarding your specific situation.
A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion.