Robert Brokamp

All right, let's move on to benefit number five, leaving tax-free assets to your heirs.

Yeah, you touched on that 10-year rule, right?

And this is the issue with many people who inherit retirement accounts.

They do have to be distributed within 10 years.

And if that money is in a traditional IRA and the heirs are in their peak earning years, that is really going to be a big tax bill.

Okay, so those are the benefits, but are there any sort of hidden traps to contributing to or converting to a Roth that you think people should be aware of?

I'll double down on that and maybe broaden it out in that by contributing to a Roth or converting to a Roth, you're not only paying more taxes this year, but it may make you ineligible for all kinds of deductions and credits that are based on your AGI.

You have to look at the whole picture.

Well, I had my own final thoughts here.

There are plenty of online tools that can help you run the numbers on whether you should contribute or convert to a Roth.

So use a few of those.

And then if you're still not sure, seek out the advice of a tax professional or a financial advisor.

They will know all the rules and probably have some fancy software to help you make the decision.

It's time to get it done, fools, and with less than seven weeks left in 2025, now is a good time to aim for topping off your retirement accounts.

For most employer-sponsored accounts like 401 s, the deadline for 2025 contributions is December 31st, and in most situations, those contributions must come through your company's payroll.

You usually can't just send a check to the 401 provider, so you have to change your withholding before the final pay cycle to get that money into the account.

which means it needs to be done a week or two before the end of the year.

Check with your HR department to learn the cutoff date for your company.

Now, with IRAs, you have until April 15th of next year to make a 2025 contribution.

But why wait?