We all know someone that looks at everything with the "glass half empty" mentality. For those of you who can endulge your positive side, read on. There's always a bright side to events happening around us- even investment market weakness as we're experiencing today.
There are wealth planning strategies that can benefit from market weakness- one of them happens to be Roth IRA conversions. When an account owner converts IRA assets to Roth IRA when the assets are trading at lower values there is a smaller amount of resulting tax and greater chance that corresponding market improvements will occur within a tax-free Roth IRA (after conversion).
Additionally, for those account owners that have previously converted to Roth IRA the weakness creates an opportunity to weight recharacterization opportunities (reversing a Roth IRA conversion) and subsequently "re-converting" after satisfying certain waiting periods required by the IRS.
We'll keep looking at the full half of the glass for our clients.
