Can You Convert Taxable Savings Into Your Roth IRA?

taxable savings

Can You Convert Taxable Savings Into Your Roth IRA?

Are you ready for retirement? It’s a common question and it applies to just about everyone at some point. However, being ready for retirement takes a great deal of planning and preparation, and not everyone is as ready as they think. One of the most important parts of planning for your retirement comes down to how much of your hard-earned money will go to the taxman after you finally call it quits and start enjoying the fruits of a lifetime of labor. If you haven’t planned right, then you could find that your fruits are much smaller than you expected. So what can you do to make sure you keep as much of your retirement funds as you can and avoid having the taxman take more than he needs?

Consider a Roth

There are many different methods to convert your money into taxable savings, but one of the best ways to do this is by opening a Roth IRA. However, you have to do it right. If you wait too long, then you could end up costing yourself a lot of money and for some it’s no longer worth the effort. However, when done at the right time, your Roth IRA could help you save thousands in unnecessary taxes. The key is to start your Roth while you are still employed because that means you can contribute the maximum amount every year that you are still working. Through an employer sponsored Roth IRA, you and your spouse, if he or she also works, can both contribute up to $18,000 if you are over 50. Plus, if your taxable income is less than $183,000 then both of you can contribute an extra $6,500. That’s as much as $49,000 annually combined.

Timing is the Key

However, when it comes to a Roth, timing is extremely important. If you wait till retirement then this opportunity is lost. That’s because after you retire you can no longer contribute that maximum amount. Additionally, if you convert your account into a Roth IRA after you retire you will pay a conversion tax at the normal income tax rates. By starting a Roth while your still employed you not only can grow your retirement account substantially, but you can also secure a much lower tax bill at the same time. That makes opening or converting to a Roth IRA while you’re still employed can pay huge dividends.

GROCO Helps Get You Ready for Retirement

Everyone wants to be ready for retirement, but not everyone plans for retirement in the most effective way. One of the worst surprises of retirement is to find out that you owe a whole lot more in taxes from your retirement accounts than you expected. There are many different approaches one can take for planning for retirement, but if you want to maximize your tax savings then it pays to speak with an experienced accountant and tax advisor. Opening a Roth IRA while you’re still working is one method that can lead to greater tax savings, but it’s not the only one. Every person’s situation is different so what works best for one person, might not be the best for another. If you want help saving for retirement while avoiding a bigger tax bill than necessary, then please contact us at GROCO for more information by calling 1-877-CPA-2006.

We hope you found this article about “Can You Convert Taxable Savings Into Your Roth IRA?” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at  Unfortunately, we no longer give advice to other tax professionals gratis.

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Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio is a proud sponsor of The American Dreams Show.



The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

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