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Important Note:

June through November our agency may become prohibited from binding coverage should a “Tropical Disturbance” enter the Gulf of Mexico or Caribbean Sea.

In these cases we may be unable to bind new coverage quoted in open proposals until the storm leaves our area and our binding authority has been restored.

Please arrange your coverage protection early to avoid this type of delay. While we regret any inconvenience, the carriers impose these restrictions on all agencies.

Considering Roth IRA: Is Conversion for You?

According to the IRS, conversions were particularly common among IRA investors with annual incomes that exceeded $1 million. In fact, more than 10 percent of them converted an individual retirement account to a Roth. This shows a preference among the affluent to pay taxes on retirement savings now rather than later.


Should you consider a conversion? While the earnings within a Roth IRA grow tax free, experts advise that converting a tax-deferred individual retirement account may not be the best option for everyone. Consider the following situations.


Don’t convert if your investments are doing really well. You have to pay income taxes on your funds in the tax year they are converted. If your account balance is particularly high, you’ll save money by waiting to consider a Roth IRA conversion when the value goes lower.


Don’t convert if you don’t have cash to pay the taxes. While it’s possible to withdraw money from your IRA to pay the taxes on the conversion, doing so doesn’t make financial sense. Not only will those funds no longer be there for your retirement, but you may have to pay a 10 percent early withdrawal penalty as well.


Don’t convert if you have a college-aged child. Converting from a traditional IRA to a Roth will increase the income you must report to the IRS. Depending on how much you earn, this could reduce your child’s eligibility for financial aid. If that’s the case, it makes sense to postpone any conversion until after your son or daughter has graduated.


Do convert if your tax rate will be higher by the time you withdraw. Working less than full time and claiming a lot of deductions can put you in a lower tax bracket now than you may find yourself in after retirement. The same situation can arise if you eventually collect a large pension or tax rates increase across the board. In any of these cases, a Roth IRA conversion is smart because it allows you to pay taxes now, before your rate goes up.


Do convert if you want to avoid required minimum distributions. Traditional IRAs, 401(k) plans and other retirement accounts require distributions to start at age 70.5. Roth IRAs, however, do not have this requirement. That means your money has more time to grow. Keep in mind, you can wait until retirement to convert your investment account to a Roth—a good idea if you expect to slip into a lower tax bracket after you collect your last paycheck.


Whether you have a traditional individual retirement account you’d like to convert to a Roth, or are thinking about setting up your first IRA, consult your financial planner or investment advisor for further insight.