Is saving everything into a Roth for retirement the best strategy?

Deciding whether to convert all retirement savings into a Roth IRA is a hot topic, but it’s not always the best move. For individuals with substantial pre-tax savings, Roth conversions can trigger higher tax brackets, reducing potential benefits. Instead, a balanced approach to retirement planning can offer greater flexibility and long-term value.

The Case for Pre-Tax Contributions

Pre-tax contributions lower taxable income during high-earning years, allowing individuals to invest tax savings for compounded growth. This strategy often results in higher net worth compared to Roth accounts, especially for high earners. Pre-tax accounts also provide estate planning benefits and options for managing taxable accounts.

Avoiding Generic Advice

Every financial situation is unique. For lower-income families, pre-tax contributions may ease current cash flow needs, while high earners benefit from tax efficiency. Blanket advice, like converting all savings to Roth accounts, often overlooks critical variables and can lead to financial losses.

Personalized Planning is Key

Professional guidance ensures retirement strategies are tailored to individual goals. By balancing Roth and pre-tax contributions, you can optimize tax efficiency and net worth while preparing for a secure retirement. A thoughtful, customized plan is the foundation of a confident financial future.

Click here to schedule a consultation with one of our financial advisors.

Shawna Theriault, CFP®, CPA, CDFA®
Senior Financial Advisor, Wiser Wealth Management

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