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Reverse Mortgage Proceeds Can Be Used for Taxes in Converting from a Traditional IRA to a Roth IRA

November 15, 2022

An article written by "Nerd Wallet" & reprinted by "Marketwatch" discusses Roth Ladders or Roth Conversions. There is an additional little-known financial planning technique using a reverse mortgage to pay the tax burden when converting funds from your traditional IRA to your Roth. The funds from a reverse mortgage are tax-free. Most people opt to take their proceeds in a growing credit line. The credit line is revolving and cannot be shut down by the lender if market conditions worsen as long as the borrower maintains their contractual obligations of the reverse mortgage.

"You’re basically taking a portion … a little bit every year, until such time that either you’ve made your entire retirement tax free, or you’ve exhausted the top of your tax bracket,” says Renee Collins, a certified financial planner and certified public accountant at Retire Ready Inc., a financial planning firm in Chicago." Some retirees also use tax-free reverse mortgage funds to pay the tax burden of converting a traditional IRA to a Roth. Read the entire article by clicking here. 

#tax # #financialplanning #rothconversion #reversemortgages #taxplanning

Angella Conrard profile picture
Angella Conrard
I am designated a Certified Reverse Mortgage Professional by the National Reverse Mortgage Lender's Association. I work exclusively with reverse mortgage loans in nine states. I have a passion for helping my clients. I think everyone can and should live their most comfortable life. I am the founder of the National Aging in Place Council- Orange County, California, emeritus. I've practiced yoga all my adult life and am strongly interested in health and well-being. I am a lifetime helper.
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I am designated a Certified Reverse Mortgage Professional by the National Reverse Mortgage Lender's Association. I work exclusively with reverse mortgage loans in nine states. I have a passion for hel...
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