Phil Cannella often coaches
his clients and readers to covert their tax-deferred retirement accounts into tax-free accounts. It’s a beneficial IRA law that many retirees don’t even know about.
Are you wondering how Roth conversions even exist? It seems very generous on the part of the IRS, right? We have William Roth to thank. He was a fiscal conservative who dedicated his political life to the easing of taxes on the middle class. He led the legislative effort to create the Roth IRA. But Phil Cannella makes it clear that just because Uncle Sam giveth doesn’t mean he won’t taketh away.
Every year around your birthday, you should be receiving reports showing what you’ve paid into Social Security and what you can expect your social security payment to be when you retire. The report clearly states that within the next ten years, Social Security will pay out more than it will collect.
What does that mean for you? Simply stated, there won’t be any Social Security left for you. For most people at the tail end of the baby boom generation, that is devastating news.
Economists have said it time and time again and Phil Cannella agrees: the IRS is addicted to taxation. Unfortunately, our government can’t survive without it. How will the government solve this Social Security crisis? By raising taxes of course. And unfortunately our retirement accounts are the only place left where money hasn’t been taxed.
The U.S. holds over $10 trillion in tax-deferred retirement accounts, and it is very likely that tax-free Roth conversions will go away in the coming years. The IRS will be starving for taxes and the taxes it collects at the conversion won’t be enough. When that happens, it is likely that everyone who has already converted will be grandfathered in, so Phil Cannella urges you to convert now while the Roth is still available.
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