ENHANCE YOUR FINANCIAL FUTURE WITH ROTH CONVERSIONS & 529 PLANS

Choosing the right accounts to save and invest in can lead to significant tax savings over time, putting more money in your pocket both today and in the future, strengthening your long-term financial success. Roth conversions offer the potential for tax-free growth, while Required Minimum Distributions (RMDs) can be repurposed to support family wealth or charitable giving. Additionally, recent changes to 529 plans provide new opportunities to help maximize savings beyond education expenses. Understanding how to leverage these tools can help you secure a stronger financial future while helping to mitigate tax burdens.

STRATEGIC MOVES DESIGNED TO HELP REDUCE TAXES AND BUILD WEALTH FOR GENERATIONS

IS A ROTH CONVERSION RIGHT FOR YOU?

Converting a traditional IRA to a Roth IRA can provide tax-free growth and withdrawals in retirement, but the decision depends on key factors. Our Roth Conversion Calculator assists in determining if the long-term benefits outweigh the tax on conversion. To help maximize the strategy, the tax on conversion should ideally be paid using outside funds rather than reducing the converted amount. Some clients use their Required Minimum Distributions (RMDs) to cover the tax, making it a powerful tool for optimizing their tax situation while helping to secure future retirement benefits.

RMD: A TOOL FOR GIFTING & LEGACY PLANNING

For those who don’t need their Required Minimum Distributions for everyday expenses, these funds can be strategically allocated to support future generations or charitable giving. Many clients are using their RMDs to fund 529 plans for children and grandchildren, ensuring education savings grow tax-free. Others are contributing to joint investment accounts with loved ones, creating opportunities for financial growth. Some even use their RMDs for charitable donations, leveraging tax benefits while making a meaningful impact.

UNLOCK HIDDEN BENEFITS OF 529 PLANS

529 college savings plans are evolving beyond education funding, offering new advantages for long-term financial planning. With the SECURE Act 2.0, up to $35,000 from a 529 plan held for at least 15 years can be rolled over into a Roth IRA. This change provides a way to repurpose unused education funds, allowing beneficiaries to enjoy tax-free growth and retirement savings. Instead of letting excess 529 funds go to waste, this strategy ensures they contribute to financial security for the next generation.

Making strategic financial decisions today can create lasting benefits for you and your loved ones. Whether you're considering a Roth conversion, optimizing your RMDs, or exploring the enhanced flexibility of 529 plans, understanding your options is key to help maximize your wealth and minimize taxes. Our team at Phases Financial Group is here to guide you through these opportunities and help you make informed, tax-efficient choices.

The financial advisors at Phases Financial Group operate as independent financial advisors for Addison Avenue Investment Services. Financial advisors offer securities through Raymond James Financial Services, Inc. Member FINRA/SIPC, and securities are not insured by credit union insurance, the NCUA or any other government agency, are not deposits or obligations of the credit union, are not guaranteed by the credit union, and are subject to risks, including the possible loss of principal. Phases Financial Group is not a registered broker/dealer and is independent of Raymond James Financial Services. Additionally, First Technology Federal Credit Union and Addison Avenue Investment Services are not registered broker/dealers and are independent of Raymond James Financial Services and Phases Financial Group. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Phases Financial Group and not necessarily those of Raymond James.

The information provided is a not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advise on tax issues, these matters should be discussed with the appropriate professional.

529 plans come with fees and expenses, and there is a risk they may lose money or under-perform. Most states offer their own 529 programs, which may provide benefits exclusively for their residents. Please consider whether the state plan offers any tax or other benefits. Tax implications can vary significantly from state to state.

Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before complete tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.