Service a Patelco IRA
To service an existing Patelco IRA (request a withdrawal, make a contribution, manage beneficiary information, etc.), you can do one of two things:
- Visit the IRA Service Center
- Call 800.358.8228
Note for Screen Readers: If you are using a screen reader and are having problems using this website, please call 800-358-8228 for assistance.
A revised government tax law makes it easier than ever to convert your traditional IRA to a Roth IRA: The existing $100,000 maximum individual income level for converting a traditional IRA to a Roth IRA will no longer apply. Simply put, this means you can convert your tax-deferred retirement accounts to tax-free accounts by paying taxes at the current rates.
But just because you can, does that mean you should? That answer depends on many factors, including your income tax rate, the length of time you can leave the funds in the Roth IRA without taking withdrawals, your state's tax laws, and how you'll pay the income taxes due at the time of the conversion.
Remember, the main reasons you may want to convert to Roth would be that you believe your tax rates when you retire will be higher than they are now, or you believe you can afford the taxes now and are not sure of your ability to pay those taxes when you retire. Consider the following example...
Roth Conversion Example:
You expect your AGI (adjusted gross income) to be $85,000 this calendar year and you want to convert $40,000 of deductible Traditional IRA funds (money you have never paid federal income tax on before) to a Roth. So when calculating your tax liability for the year, your AGI is now $85,000 + $40,000 or $125,000. If your incremental tax bracket is 25%, then you will need to pay an additional 25% of $40,000 or $10,000 in federal income taxes for the year of the conversion.
Therefore, in the context of the example above, if you believe that paying $10,000 in additional taxes now will be more advantageous than paying those taxes at retirement, then the Roth Conversion may be right for you.
Patelco does not offer tax advice. Please consult with your tax professional for tax-related details.
We don't blame you; the Roth Conversion is complex and difficult to understand.
Luckily, the Financial Advisors† at Patelco know this process inside and out and can review your finances to see if it's the right move for you. Even better, the advice is complimentary. Find your Financial Advisor and make an appointment today!