Don’t miss out on advantages that come with Roth accounts

By the Editorial Team · Sunday, September 6, 2026

Financial advisors recommend that individuals, especially those under age 73, prioritize contributing to Roth accounts and consider converting traditional IRAs to Roths to benefit from tax-free growth and withdrawals. This strategy can reduce future tax burdens, delay required minimum distributions, and offer more favorable inheritance rules for beneficiaries.

Financial advisors emphasize the potential long-term benefits of contributing to Roth accounts rather than traditional IRAs or 401(k)s, even for individuals who start working with a low marginal tax bracket. The argument centers on the tax advantages tied to Roth accounts, which grow tax-free and do not impose taxes on withdrawals during retirement.

One key benefit highlighted is that traditional IRA contributions offer an immediate tax deduction, but withdrawals in retirement are taxed as ordinary income, often at higher rates due to bracket increases over time. In contrast, Roth contributions are made with after-tax dollars, allowing investors to avoid paying income tax on future earnings and withdrawals.

Experts note the importance of opening a Roth account as early as possible. This timing affects the five-year holding period required for qualified Roth conversions. Individuals who opened Roth accounts years ago can convert traditional IRAs without restarting this period, potentially allowing earlier access to tax-free withdrawals.

Recent regulatory changes have also shifted required minimum distribution (RMD) rules. The age at which retirees must begin taking RMDs from retirement accounts has increased to 73, and the annual RMD amount is calculated based on age and account value as of the previous year-end. Delaying Roth conversions may increase future tax liabilities, as traditional IRAs continue to grow with interest, dividends, and market gains, thereby raising the taxable RMD amounts.

The transition from traditional to Roth accounts has implications beyond the account holder. Beneficiaries inheriting Roth accounts generally face fewer tax burdens. Unlike traditional IRAs, which require most beneficiaries to begin taking taxable distributions within a year of the account holder’s death, Roth accounts inherited by non-spouse beneficiaries may be withdrawn tax-free over a 10-year period, allowing continued tax-free growth.

Financial professionals recommend individuals under 73 with traditional IRA assets consider converting some or all of these funds to Roth accounts before reaching the RMD age to reduce future tax exposure. Additionally, those earning income in retirement are encouraged to contribute to Roth IRAs rather than traditional accounts. The advantages also apply to Roth 401(k) accounts, making them a strategically favorable option for retirement savings planning.

Overall, careful consideration of tax implications and timely Roth conversions can help retirees manage their tax liabilities more effectively and provide beneficiaries with greater financial advantages.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.