Those with high financial literacy and awareness are already wondering what the impact of the proposed infrastructure bill would be on their personal financial situation. It is expected that some taxes will increase which leads some Americans to think about Roth accounts and retirement investment conversion. The advantage of Roth accounts is that funding comes from money that is already taxed, making distributions, after certain age, tax free. This is advantageous for those expecting to pay more taxes in retirement than what they currently pay.
Key Takeaways:
- President Biden has proposed a 2.3 trillion dollar infrastructure plan which will raise corporate tax 7%.
- Many people in their mid to late 50s are switching to a Roth 401K plan instead of the traditional one.
- A Roth conversion may be beneficial but it is too early to tell and really depends on how much the person makes and if they can cover tax liability.
“Biden did not specifically mention tax rates for individual Americans, though he had said he would not raise taxes for anyone who makes less than $400,000 a year.”
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