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Fiscal cliff deal allows more flexibility for retirement savers

By Katherine Mozzone, KTVM Reporter, kmozzone@ktvm.com
Published On: Jan 04 2013 07:09:30 PM MST
BOZEMAN, Mont. -

Under the fiscal cliff deal, folks will have a little more flexibility on how they can save for retirement.
     
We talked to a wealth adviser with Cascade Financial to find out more.
     
Michael McCormick told us before restrictions were lifted, you needed to reach 59 1/2 years of age or leave your employer to convert your traditional 401(k) to a Roth.  Now, he says people can move their money from existing, pre-taxed IRA's to an after-tax Roth 401(k) or IRA.
     
He told us, that way, folks can pay taxes at today's tax rate without having to worry about rates going up.
     
Yet, McCormick says, it's not for everyone.    

"The people that do it typically have surplus cash available today to pay that tax bill.  It means you're paying a lot in taxes today to avoid paying taxes tomorrow and they recognize that this is a great way for them to have their money in a purely tax-free state," says McCormick.

McCormick says another advantage of the Roth is that you don't have to take your money out when you grow older since the money has already been taxed.

For more information, you can call McCormick at 219-3985.