12/15/20 - Winning with Mainstay Financial Group - Bob Beargy

Year-End Stressors and how to mitigate according to this Psychology Today article.

Year-End Financial and Tax considerations and tips.

Taking income this year vs. next year: We usually defer to the principle that it’s better to pay the income taxes later. There are rare instances where it makes sense to prepay. Talk to your financial advisor to learn if converting your traditional IRA to a Roth IRA is the right move to you.

Roth IRA is an account that will grow tax-free – no income tax paid on dividends, interest, capital gains, etc. – because it’s a qualified account. When you pull the money out after years – hopefully decades – of compounding tax-free, you don’t pay taxes on any of the money you withdraw. When this option became offered in 1998, it created a great deal of revenue for the government.

Back Door Roth: Make a contribution to a traditional IRA and immediately convert it to a Roth IRA.

Bob also answers listener questions about Roth Conversions vs. Roth Contributions and “bunching” itemized deductions into a single tax year. You can also use bunching as a strategy to harvest capital losses to offset gain. Keep in mind the “wash sale rule” when it comes to capital losses.

Connect with the Mainstay Financial Group at their website here:

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