Mesirow's Gary Pattengale Breaks Down Roth IRA Strategies for High Net Worth Investors
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~ Mesirow Advanced Planning Specialist and Wealth Advisor, Gary Pattengale, CFP®, recently appeared on WGN's "Your Money Matters" with Jon Hansen for their "Mesirow Monday" segment. During the show, Gary discussed the strategic opportunities and potential pitfalls of Roth accounts and conversions, specifically for high net worth individuals who are focused on long-term wealth optimization.

According to Gary, taxes should not be an afterthought in retirement planning. He believes that incorporating tax strategy into financial planning can be a powerful tool for control, flexibility, and legacy building. As an expert in advanced planning at Mesirow, Gary joined Jon Hansen to share his insights on Roth accounts and conversions.

Roth IRAs and Roth 401(k)s differ from traditional retirement accounts in that they are funded with after-tax dollars but grow and can be withdrawn tax-free. Additionally, they are not subject to required minimum distributions (RMDs), making them a valuable asset in managing future income and taxes.

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During the interview, Gary stressed the importance of tax diversification by holding both Roth and traditional accounts. This can help hedge against potential changes in tax rates or legislative uncertainty.

While Roth conversions are often touted as a universal solution, Gary cautioned that they can have unintended consequences such as triggering higher Medicare premiums or taxation on capital gains or Social Security benefits. He advised that phased conversions during lower-income years, typically post-retirement but pre-RMD, can offer significant benefits if timed correctly.

Gary also warned against using funds from the IRA itself to pay conversion taxes: "The moment you reduce the converted amount to pay taxes, you lose much of the long-term upside."

Mesirow Wealth Management is the founding capability of Mesirow Financial and provides comprehensive financial planning services to help clients make informed decisions and align their tax strategy with their investment, estate, and philanthropic goals.

In conclusion, Gary Pattengale's appearance on WGN's "Your Money Matters" shed light on the importance of incorporating tax strategy into retirement planning and the potential benefits and pitfalls of Roth accounts and conversions for high net worth individuals.

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