Phillip Cannella Media: Phil Cannella Discusses Roth Restrictions

Phil Cannella – Phillip Cannella Media: Phil Cannella is very knowledgeable in the field of retirement planning having helped seniors in various ways for almost 40 years now. A key aspect of Phil Cannella’s educational program is teaching the merits of a Roth conversion and how it could benefit the individual consumer.

Phil Cannella gives us the two rules for a Roth to become completely tax-free and these are: “Once you convert your IRA to a Roth, you must satisfy two rules for it to become tax-free. The first rule requires that you wait five years after converting the account before withdrawing any gains.  Touch those gains before the five years are up and you’ll have to pay taxes and possibly a penalty.  If you need or anticipate you may need income from your retirement account for living expenses within the next five years, then you should put off the Roth conversion – or only partially convert – until you have enough assets from other sources to sustain yourself.”

Phil Cannella goes on to explain: “The second rule states that your annual income can’t exceed $100,000 in the year that you make the Roth conversion.  If you’re in your retired years and make over $100,000 annually, you cannot convert a tax-deferred IRA to a Roth account.”


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