InvestmentNews: To Roth or Not to Roth? That is the Question

April 14, 2014

A version of this article was posted on  on April 14, 2014

By Robert Cirrotti, Head of Retirement Solutions, Pershing LLC, a BNY Mellon company

Although Roth IRAs have been available since 1997, changes in recent years to the U.S. tax code have made these retirement savings accounts more popular than ever.

In 2010, higher income limits allowed larger numbers of investors, particularly high-net-worth investors, to qualify for Roth IRAs. Then, in 2013, the Internal Revenue Service confirmed that those 401(k) plans that offer a Roth option may allow their participants to roll over funds in their plan to an "in-plan" Roth account.

These changes not only broaden the appeal of Roth IRAs to high-net-worth investors, they also enable advisors to reach out to their clients and prospects with a potentially appealing wealth transfer strategy. Or, as the playwright William Shakespeare might have said (assuming, of course, he also moonlighted as an advisor): "A Roth by any other name would smell as sweet."

To Roth or Not to Roth? That is the Question [PDF]