A Roth conversion ladder can help early retirees access retirement savings before age 59 ½ without triggering the usual early withdrawal penalty. The strategy works by gradually converting pretax retirement money to a Roth IRA. However, timing is critical: Each conversion generally has its own five-year waiting period before it’s possible to withdraw converted taxable amounts without the penalty.
A financial advisor can help you coordinate Roth conversions with your expected retirement income, tax brackets and the savings you may need to cover the five-year waiting period.
How a Roth Conversion Ladder Works
A Roth conversion ladder moves money…
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