Despite declining federal budget deficits, the large and growing national debt has created a common perception that, at some point, tax burdens must rise to address the issue. While no one knows for certain, the mere belief that higher tax rates are inevitable has become a strong driver for advisors and clients to do whatever they can to manage that future tax exposure.
One of the most popular strategies has been to take tax exposure off the table altogether by contributing to Roth accounts and/or doing Roth conversions. The goal: Pay taxes now, when rates are lower, and not in the future when they may be higher.
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