10 ideas to use a Roth IRA to mitigate higher taxes

Bill Cass, CFP®, CPWA®

Bill Cass, CFP®, CPWA®, 03/31/21

The current tax environment and potential for higher tax rates in the future create an opportunity for tax-smart planning.

Investors may want to consider certain strategies to hedge against the risk of higher taxes, including using a Roth IRA conversion.

Here are 10 Roth IRA strategies to consider.

10 Roth strategies

Tax-smart planning

A myriad of factors may suggest higher taxes soon. These include the expiration of most tax provisions in 2025, unprecedented federal budget deficits, and uncertain tax policy as a new administration and Congress gains hold in Washington.

It’s important for investors to work with a tax consultant or financial professional who has knowledge of their personal financial situation. A Roth conversion requires a thoughtful decision, since in most cases, taxable income is being generated on the transaction. The decision to complete a Roth conversion also cannot be reversed.