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IRA Strategies & Planning

The importance of planning for retirement can’t be overstated, and an Individual Retirement Account (IRA) is a cornerstone of many successful retirement strategies. At Bighorn Wealth, we want to help you navigate the complexities of IRAs. We can help you optimize your retirement savings, including your employer-sponsored plans, any Roth conversions you may be considering, and more.

Employer-Sponsored Plan Optimization

Employer-sponsored retirement plans are a valuable benefit, offering a straightforward way to save for retirement. Optimizing these plans involves maximizing your contributions to meet or exceed the employer match, when available, and selecting the right investments within the plan to align with your retirement goals and risk tolerance. Knowing your options is a big part of IRA strategizing.

Roth Conversions

Roth Conversions

Roth conversions involve transferring funds from a traditional IRA or employer-sponsored plan to a Roth IRA. This strategy can be advantageous for those who expect to be in a higher tax bracket in retirement, as Roth IRAs offer tax-free withdrawals in retirement. It's important to consider the tax implications of a conversion, as converted amounts are taxable in the year the conversion takes place.

Backdoor Roth Strategies

For individuals whose income exceeds the limits for contributing to a Roth IRA, backdoor Roth strategies provide an alternative route. This involves making a non-deductible contribution to a traditional IRA and then converting that amount to a Roth IRA. While this strategy offers a way to benefit from Roth IRA advantages, it's crucial to understand the pro-rata rule and potential tax consequences.

FAQs

What is the pro rata rule?

The pro rata rule in the context of IRA conversions (especially when dealing with backdoor Roth IRA strategies) refers to the calculation used by the IRS to determine the taxable portion of a conversion from a traditional IRA to a Roth IRA when the taxpayer has both pre-tax and after-tax dollars in their IRAs. This rule essentially ensures that the conversion is taxed proportionally based on the ratio of after-tax contributions to the total IRA balance. 

How do catch-up contributions work?

Catch-up contributions allow individuals aged 50 and over to contribute additional funds to their IRAs and employer-sponsored retirement plans. This is an excellent way to boost your retirement savings if you're getting a late start or want to maximize your contributions as you approach retirement.

What should I do with my IRA?

The best approach depends on your financial situation, goals, and the types of IRAs you have. Consider diversifying your investments within your IRA, making regular contributions, and exploring strategies like Roth conversions or backdoor Roth IRAs to optimize your retirement savings. Bighorn Wealth can help you make the best decisions based on your goals and circumstances.

Incorporating Your IRA Strategies

Incorporating Your IRA Strategies

IRA Benefits: Understanding the benefits of different types of IRAs can help you make informed decisions about how to structure your retirement savings.

How to Invest Your IRA: Diversifying your investments based on your risk tolerance and retirement timeline is key.

Retirement Account Rollovers: Consider rolling over old 401(k)s to an IRA to keep your retirement savings consolidated and potentially access a wider range of investment options.

Contribution and Withdrawal Strategies: Plan your contributions to take full advantage of tax benefits and develop a withdrawal strategy that minimizes taxes and penalties.

IRA Planning Help Near Me

IRA Planning Help Near Me

Need some help with your IRA? We know it can be confusing. At Bighorn Wealth, we're dedicated to helping you navigate the path to a secure retirement. By understanding and applying these IRA strategies and planning tips, you can make the most of your retirement savings and avoid unnecessary taxation. For personalized advice and to explore more strategies tailored to your unique situation, connect with our team today. We relish the opportunity to speak with you!