New Rules for Roth 401K Conversions

New rules for in-plan Roth 401(k) conversions have opened up some interesting new planning possibilities – and although the conversions come with a few pitfalls, some clients will find them to be a valuable option.

The new tax deal (known formally as the American Taxpayer Relief Act) modifies the original 2010 rules by allowing clients to make in-plan conversions even if they are not eligible to take a distribution from the plan. That broadens the impact considerably: Many more clients will now be able to make this type of conversion.

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