Consider These Tax Moves as 2013 Comes to a Close

By Janet Kidd Stewart
Chicago Tribune

With 2013 almost in the books, some last-minute tax moves for your retirement money could help you start 2014 off right.

New retirees whose income will be significantly lower this year than it has been or who are picking up self-employed gigs as they downshift into retirement, and anyone who turned 70 { this year should pay especially close attention to these three strategies, experts say:

ROTH WHILE YOU CAN: If you’ve retired but haven’t yet started taking Social Security and large retirement account distributions, you may be in a sweet spot to convert some assets in traditional individual retirement accounts to a Roth IRA, said Chris Benson, an accountant and financial adviser with L.K. Benson & Co. in Towson, Md.

“I just got out of a client meeting with someone who retired a couple years ago but hasn’t started taking big 401(k) distributions yet,” Benson said. “Right now he’s in a pretty low bracket and just has some investment income, so we’re looking at converting some of that money to a Roth.”

Hate the thought of paying income taxes to convert to a Roth by the year-end deadline only to see those assets decline in value if markets go into a correction in 2014? You can undo the deed by recharacterizing the conversion by Oct. 15, 2014.

DIY 401(K): If you’re picking up some consulting work as you downshift a career, consider using this time to double down on retirement savings with an individual 401(k), also known as a Solo-401(k).

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