Will my Roth IRA conversion be penalty free?

Converting a portion of an IRA to a Roth IRA is complex process that involves many moving parts and can have some unintended consequences if not properly handled, including a possible impact on Medicare premiums two years after the conversion.

To help make this easier, we have created the “Will My Roth IRA Conversion Be Penalty Free? flowchart. It addresses common issues that occur when doing a Roth conversion:

• Implications for IRAs with nondeductible IRA contributions
• Pro-rata and aggregation rules
• Simple IRA rules
• Medicare Part B and Part D surcharge impact
• 5 year rule on the Roth IRA
• 5 year rule on the conversion
• RMD coordination issues

This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.