Mark Riepe, CFA, Senior Vice President At The Schwab Center For Financial Research, Explaining Roth IRA Fundamentals (Graphic: Business Wire)

As the country gets into the heart of tax season, people are thinking about investing in IRAs as a way to help maximize tax savings and plan for retirement. For those people considering a Roth IRA conversion, Schwab is making additional resources and tools available to investors, independent investment advisor clients, and 401(k) plan participants designed to help navigate the decision making process.

Prior to January 1, 2010, only people with modified adjusted gross incomes of $100,000 or less were eligible to convert assets from certain retirement savings accounts, such as a traditional IRA or a 401(k) with a previous employer, to a Roth IRA. However, a recent rule change now makes more investors eligible to convert regardless of income level. ¹

Quick Assessment, Webcast and Online Videos for Investors

For investors seeking help and guidance regarding Roth IRA conversions, Schwab has recently launched an Online Quick Assessment in which investors can answer a few brief questions to explore whether a Roth IRA conversion might make sense for them. The questions focus on current retirement accounts, expected time horizon to retirement, estate plans, and conversion taxes. After completing the questions, investors receive tailored next steps to further explore if Roth IRA conversion is appropriate. The tool also pops up useful tips and explanations during the process to help people understand the considerations and rules around conversion.

Schwab has also produced a webcast entitled, Roth Conversion – Is it Right for You?, featuring Mark Riepe, CFA, senior vice president at the Schwab Center for Financial Research, explaining Roth IRA fundamentals. The webcast, which is available at www.schwab.com/rothvideo, covers Roth IRA basics, the differences between traditional and Roth IRAs, the benefits of Roth IRAs, when conversion may and may not make sense, when a partial conversion might be the right choice, and where to find help at Schwab. The webcast is also available for Schwab’s independent investment advisor clients.

In addition, Schwab has launched a series of short videos addressing investors’ common questions about Roth IRAs and Roth IRA conversion, including how a Roth IRA can help with estate planning, the benefits that may be available when converting to a Roth IRA, and some of the potential tax implications of a Roth IRA conversion.

Resources for Independent Investment Advisors – Roth Decision Guide, Conversion Calculator and Advisor Webcast

For its independent investment advisor clients, Schwab has created a Roth Decision Guide designed to help advisors guide their clients through a thoughtful consideration of the costs and benefits of conversion. The guide can help advisors answer initial questions their clients might have, such as the benefits of a Roth IRA and details about the conversion rule change. A Roth Decision Matrix helps advisors discuss key considerations with their clients that can influence the decision to convert and how much to convert. Some of the key considerations in the guide include expected future tax rates, a client’s time horizon to retirement, the client’s ability to pay taxes from a non-IRA account, impact on a client’s current tax bracket, and the client’s estate planning needs.