City Lifestyle

Want to start a publication?

Learn More

Featured Article

Have you Considered a Roth IRA?

Here are the Reasons Why You Should

All of us want more bang for our buck, and that means paying fewer taxes. If you’re diligently saving for retirement, you’ve likely got an Individual Retirement Account, or IRA. But is this the best way to squirrel away funds, or should you consider another type of account: the Roth IRA? 

Jesse Scroggins of Scroggins Wealth Team Senior Vice President at Southwest Investment Group, briefs clients with conversations they should have with their CPA at tax time. According to Scroggins, there are distinct advantages to a Roth IRA, and it’s worth bringing up to your accountant. 

Federal taxes are currently low. 

Right now, taxes are historically low. When you create a retirement account, it’s wise to think about taxes with a long-term perspective, according to Scroggins. With a Roth IRA, you pay taxes on the “front end,” rather than later. 

“We look at reducing one’s taxes over their entire lifetime. Sometimes, it makes sense to convert from a traditional IRA to a Roth and pay taxes now. It is likely that taxes will rise in the future and not go down,” he explained, adding that current tax law is set to expire at the end of 2025.

You can convert funds from your IRA without limits. 

Here is great news: if you are converting your regular IRA into a Roth — even if your IRA is already quite hefty — you can sneak around the typical contribution limits. 

“There are income limits on contributing directly, but those limits don’t apply to converting,” Scroggins noted. “The limit is $6,000 per year, or $7,000 if you are over age 50. That’s to contribute directly per year, currently. But you can convert any amount. For example, you can convert $100,000 from your traditional IRA to a Roth all at once.”

Both working folks and retirees can benefit from a Roth. 

Scroggins pointed out those who already retired might want to convert to a Roth. Unlike with traditional IRAs, there is no appointed time to pull money out. 

“At age 72, with a traditional IRA, you have to pull money out. But with a Roth, you don’t have to. Conventional wisdom is to let IRAs build up until minimum required distribution, age 72, but a proactive approach would be to consider doing partial conversions to a Roth while in early retirement,” he said. 

You can avoid the “widow penalty”. 

In most cases, spouses die separately, leaving one spouse filing individually. Converting to Roth while in the joint tax bracket could benefit a widow or widower down the road. 


The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of [INSERT NAME] and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. 

Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional

Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion. 

Like Traditional IRAs, contribution limits apply to Roth IRAs. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free.