Should I Do a Roth Conversion Before or After My Retirement Accounts Are Divided in a Divorce?

You’re 59.

You and your spouse are getting divorced after 28 years of marriage.

Together, you have:

• $1.8 million in traditional IRAs and 401(k)s
• $250,000 in Roth accounts
• $500,000 in taxable investments and cash
• A house with substantial equity

Before the divorce, you were discussing a Roth conversion strategy.

Now you’re wondering:

“Should we convert some of the retirement money before we divide everything?”

That’s not a small question.

Because divorce doesn’t just divide assets.

It can divide the tax problem too.

A Roth conversion that looked reasonable when you were planning retirement as a married couple may look completely different when two people are building separate retirement plans.

Quick Answer: Should You Convert Before or After Divorce?

Don’t make that decision from the IRA balance alone.

Before converting, you need to know:

• Who currently owns the retirement account
• How the retirement assets are expected to be divided
• What type of account is being divided
• How the transfer will legally occur
• Who will ultimately own the converted assets
• Who may bear the tax consequences of the conversion
• Expected filing status
• Each person’s post-divorce income
• Each person’s available cash
• Each person’s future retirement-income needs

A Roth conversion before the divorce and a Roth conversion after the divorce can create very different economic outcomes.

Divorce Changes the Roth Conversion Question

Before the divorce, you may have been asking:

“How much should we convert?”

Now there are several questions.

How much should you convert?

How much should your spouse convert?

Should either of you convert before the retirement assets are divided?

Should the accounts be divided first?

Who has the cash to address the conversion tax?

Who needs more liquidity?

Who expects higher future income?

Who has the larger traditional IRA after the settlement?

The old household strategy may no longer be the right strategy for either individual.

First, Understand How an IRA Can Be Divided in Divorce

A traditional IRA isn’t handled exactly the same way as an employer-sponsored retirement plan.

Under current federal rules, an interest in a traditional IRA transferred to a spouse or former spouse under a qualifying divorce or separate-maintenance decree, or qualifying written instrument related to that decree, can generally be transferred without treating the transfer itself as a taxable distribution.

After the transfer, the transferred IRA interest is generally treated as belonging to the recipient spouse or former spouse.

That distinction matters enormously.

Example: $1 Million IRA Is Divided

Suppose you own a $1 million traditional IRA.

Under the divorce settlement, $400,000 is to be transferred to your former spouse.

If the transfer is properly completed under the applicable divorce-transfer rules, the $400,000 can generally move without you first withdrawing $400,000 as taxable cash and handing it to your ex-spouse.

After the qualifying transfer, your former spouse generally owns that IRA interest.

Now each of you can evaluate your own retirement strategy.

Don’t Just Withdraw the IRA and Write Your Ex-Spouse a Check

This can be a very expensive misunderstanding.

Suppose the divorce settlement says your spouse is supposed to receive $300,000 of retirement assets.

You think:

“Fine. I’ll withdraw $300,000 and give it to them.”

That isn’t necessarily the same as a qualifying IRA transfer incident to divorce.

A traditional IRA withdrawal can create taxable income for the IRA owner.

If the owner is under age 59½, an additional 10% federal tax may also apply unless an exception is available.

The transfer mechanics matter.

What About a 401(k)?

Employer-sponsored retirement plans can involve different rules.

A qualified domestic relations order, commonly called a QDRO, may be used to give an alternate payee rights to some or all of a participant’s benefits under a qualified retirement plan.

This is different from the rules governing a transfer of an IRA interest incident to divorce.

Don’t assume:

“My IRA and my 401(k) are both retirement accounts, so divorce treats them exactly the same.”

They can require different legal and administrative processes.

Does an IRA Need a QDRO?

People often use the word QDRO for every retirement asset divided in divorce.

That’s too broad.

QDRO rules generally relate to qualified employer retirement plans.

IRAs have separate federal rules for qualifying transfers incident to divorce.

Your divorce attorney, tax professional, and retirement-plan administrator or IRA custodian should coordinate the proper method for the specific account involved.

Now Add a Roth Conversion

This is where things get more complicated.

Suppose you have a $1.4 million traditional IRA.

You expect $600,000 of it to be transferred to your spouse under the divorce settlement.

Before that transfer occurs, you convert $300,000 to Roth.

Now you need to understand:

• Whose account was converted
• Who is responsible for the resulting taxable income
• Whether the settlement contemplated the conversion
• How the converted Roth assets will be divided
• Whether the tax liability was considered when dividing property

Converting first and figuring out the divorce economics later can create a mess.

Pre-Tax Dollars and Roth Dollars Aren’t Economically Identical

This matters in divorce negotiations.

Imagine two accounts:

Account A: $500,000 traditional IRA.

Account B: $500,000 Roth IRA.

The statements both say $500,000.

But that doesn’t mean the accounts have identical future tax characteristics.

Traditional IRA distributions are generally taxable to the extent they represent untaxed amounts.

Qualified Roth IRA distributions are generally tax-free under current federal rules when applicable requirements are satisfied.

A dollar of pre-tax retirement money and a dollar of Roth money shouldn’t automatically be treated as economically identical just because the account statements show the same balance.

Example: “You Take the IRA, I’ll Take the Roth”

Suppose a divorcing couple has:

• $800,000 traditional IRA
• $800,000 Roth IRA

Someone suggests:

“Easy. One person takes the traditional IRA and the other takes the Roth.”

Both receive $800,000 on paper.

But their future tax characteristics may be very different.

That doesn’t automatically mean the split is unfair.

There may be other assets, liabilities, tax assumptions, and settlement considerations.

It means the tax character of retirement assets belongs in the conversation.

Should You Convert Before the Retirement Assets Are Divided?

There can be circumstances where a pre-division conversion is worth modeling.

But it should be intentional.

For example, the couple may still be filing jointly for the relevant year and may have an income situation that makes a conversion worth evaluating.

But you still need to answer:

Who receives the Roth asset?

Who bears the economic cost of the conversion tax?

Was that tax reflected in the property settlement?

Would each spouse independently choose the same conversion if the accounts were already divided?

Should You Wait Until After the Divorce?

There can also be a strong reason to wait.

After the retirement accounts are properly divided, each person knows what they actually own.

Then each person can build a separate Roth conversion strategy around:

• Their traditional IRA balance
• Their Roth balance
• Their cash
• Their income
• Their Social Security
• Their pension
• Their housing costs
• Their healthcare costs
• Their future RMDs
• Their beneficiaries

After divorce, “our retirement plan” becomes “my retirement plan.”

Filing Status Can Change the Math

This is one of the biggest reasons not to reuse the old conversion plan.

A couple may have modeled Roth conversions using married-filing-jointly assumptions.

After the divorce, the applicable filing status may change.

That can change:

• Tax brackets
• Deductions
• Income thresholds
• Capital-gain interactions
• Net Investment Income Tax considerations
• Other income-based calculations

The exact tax impact should be evaluated for the year involved.

The Date the Divorce Becomes Final Matters

Tax filing status is generally determined under federal rules based on marital status at the end of the tax year, subject to specific rules and exceptions.

That means a divorce finalized late in the year can materially change the tax assumptions used for a Roth conversion.

If you’re planning a large conversion while a divorce is expected to become final near year-end, don’t guess at the filing status.

Confirm it with your tax professional.

Example: The Old Plan Was a $200,000 Conversion

Suppose you and your spouse had planned a $200,000 Roth conversion.

Then the marriage ends.

You receive:

• $900,000 traditional IRA
• $100,000 Roth IRA
• $200,000 taxable assets

Your former spouse receives a different mix.

Your income is also different.

Your housing costs are different.

Your filing status is different.

Your available cash is different.

There is no reason to assume the old $200,000 conversion is still the right number.

Divorce Can Create a Liquidity Problem

This is one of the biggest issues I would watch.

Before the divorce, you had one household.

Now there are two.

That can mean:

• Two housing payments
• Two sets of utilities
• Two emergency reserves
• Legal fees
• Moving costs
• Furniture
• Insurance changes
• Potential support obligations

Then someone says:

“Let’s use $100,000 of cash to pay Roth conversion taxes.”

Maybe that’s still a strong strategy.

Maybe that cash is exactly what you need to rebuild your financial independence.

Divorce can make liquidity more valuable at the exact moment a Roth conversion asks you to spend some of it on taxes.

Don’t Build a Tax-Efficient Retirement That Leaves You Cash-Poor

You may come out of the divorce with $1.2 million in retirement accounts and only $80,000 in cash.

On paper, you’re a millionaire.

But you also need:

• A new home
• A vehicle
• Emergency savings
• Healthcare reserves
• Monthly income

This may not be the moment to drain half your cash reserve for an aggressive conversion.

Or maybe a smaller conversion fits comfortably.

Run both.

What If You’re 58 and the Divorce Happens Before Retirement?

Now the planning horizon may still be fairly long.

Suppose you’re 58 with:

• $850,000 traditional IRA after the divorce
• $600,000 401(k)
• $175,000 taxable assets
• $120,000 annual salary

You may have several years before retirement.

A conversion while you’re still earning $120,000 may or may not be the strongest timing.

Maybe retirement creates a more attractive window.

Maybe future income stays high.

Maybe your traditional accounts are projected to grow substantially.

The divorce doesn’t automatically create the conversion opportunity. It creates a reason to rerun the projection.

What If You’re 63 and Retiring at the Same Time?

This can be very different.

You’re divorcing.

You’re leaving work.

Your salary is disappearing.

Social Security hasn’t started.

Your pension hasn’t started.

Medicare is approaching.

Now several major financial events are happening at once.

A Roth conversion may be worth evaluating during that transition, but the conversion needs to compete with your need for post-divorce liquidity.

What If One Spouse Has Most of the IRA?

This can create a major planning shift.

Before the divorce:

• Spouse A has $1.5 million traditional IRA
• Spouse B has $200,000 traditional IRA

After the property division, those balances may look completely different.

If retirement assets are transferred between spouses under applicable rules, the future RMD problem may also shift.

Don’t decide which spouse should convert based on account ownership before the divorce if the divorce settlement is about to change that ownership.

What If One Spouse Gets the House and the Other Gets the IRA?

This is another situation where account statements don’t tell the whole story.

Imagine:

Spouse A receives a $700,000 house with little debt.

Spouse B receives $700,000 of traditional IRA assets.

Both sides may appear to receive $700,000.

But the assets have very different characteristics.

The house has property taxes, maintenance, liquidity issues, and potential future gain considerations.

The traditional IRA generally carries future income-tax consequences when taxable amounts are distributed.

That doesn’t tell you what the settlement should be.

It tells you not to compare assets using account balances alone.

Who Pays the Tax If You Convert Before the Divorce?

This needs to be discussed before the conversion.

The tax reporting may follow ownership and filing rules, while the economic burden of the tax can also become part of the divorce settlement negotiations.

For example, if a large conversion occurs while the couple is still married, don’t assume both spouses will automatically view the resulting tax bill the same way.

One spouse may say:

“Why am I paying tax today to create a Roth account you’re receiving in the settlement?”

That’s not just a tax question.

It’s a divorce-settlement question.

What If the Divorce Is Hostile?

Then I would be especially cautious about making large voluntary retirement-account transactions without coordination among the appropriate professionals.

A Roth conversion changes the tax character of an asset.

It can create taxable income.

It can consume cash.

And it generally can’t simply be recharacterized back to a traditional IRA under current federal rules.

A contested divorce is not the place for financial improvisation.

What If the Divorce Is Amicable?

An amicable divorce can make coordination easier.

But it doesn’t eliminate the math.

Two reasonable people can agree on everything emotionally and still accidentally create an inefficient tax result.

If both spouses want a fair economic division, the tax character of the retirement assets should still be understood.

Can a Divorce Create a Better Roth Conversion Window?

Potentially.

Suppose your household previously had two salaries.

After divorce, you retire and your personal taxable income falls substantially.

Your traditional IRA is still large.

You may now have a period before Social Security, pension income, or future RMDs become more significant.

That can create a Roth conversion scenario worth testing.

But a lower income alone doesn’t prove that converting is the right move.

Can Divorce Make a Roth Conversion Less Attractive?

Absolutely.

Your income might fall, but your available cash might fall even faster.

You may need to buy a house.

You may need to refinance.

You may have legal expenses.

You may need a larger emergency reserve because you’re now supporting one household on one income.

Tax capacity and cash capacity are not the same thing.

What About Medicare?

If you’re approaching or already enrolled in Medicare, taxable Roth conversion income can potentially affect income-related Medicare premiums under applicable rules.

Divorce can also change filing status and household income.

Those factors should be modeled together.

What About Social Security?

Divorce can change the Social Security conversation too.

Depending on your circumstances and applicable Social Security rules, benefits based on a former spouse’s work record may become relevant.

Taxable Roth conversion income can also affect the federal calculation determining how much of Social Security benefits is included in taxable income.

Social Security claiming decisions should therefore be included in the post-divorce retirement model.

What About the Beneficiary Designations?

Don’t ignore this.

Divorce can change who you want receiving:

• Traditional IRA assets
• Roth IRA assets
• Employer-plan benefits
• Life insurance
• Annuity benefits

Court orders, plan rules, state law, federal law, and existing beneficiary designations can interact.

Work with the appropriate legal and plan professionals rather than assuming the divorce decree automatically changes every beneficiary designation exactly the way you intend.

The Emotional Reality: You’re Making Permanent Decisions While Exhausted

Divorce can create decision fatigue.

Attorney calls.

Property appraisals.

Bank statements.

Retirement statements.

Housing decisions.

Insurance.

Children.

Taxes.

Then someone asks:

“Do you want to convert $200,000 of your IRA to Roth?”

You may want to say yes just to finish another decision.

Or no because you can’t deal with one more thing.

Neither reaction is a retirement strategy.

“We Should Be Able to Handle This Ourselves”

You’ve managed money your whole adult life.

You know what an IRA is.

You understand the basic idea of Roth conversions.

You think:

“We should be able to handle this ourselves.”

Then the divorce introduces:

• IRA transfer rules
• QDROs
• New filing status
• Separate retirement plans
• New housing expenses
• Different Social Security decisions
• Different beneficiaries
• Conversion-tax questions

That’s when the retirement plan you understood starts looking unfamiliar.

“I Don’t Want to Ask My Kids for Help”

This thought becomes especially powerful after divorce.

You’re rebuilding your life.

You want to know you can handle retirement independently.

You think:

“I don’t want to ask my kids for help.”

That means liquidity matters.

Reliable retirement income matters.

Healthcare matters.

Housing matters.

And taxes matter.

A Roth conversion should strengthen that independence, not undermine it by consuming cash you may need later.

“What If We Mess This Up and Regret It?”

You’re already making one of the biggest financial transitions of your life.

You don’t want to make another irreversible decision without understanding it.

You think:

“What if we mess this up and regret it?”

That’s exactly why I want to compare the options before the conversion.

Not after.

Your Identity Is Changing Too

For decades, retirement may have been:

“What are we going to do?”

Now it’s:

“Am I going to be okay?”

That’s a completely different emotional question.

You may be willing to accept a mathematically efficient strategy as a couple that feels too aggressive when you’re responsible for your financial future alone.

That’s not irrational.

Risk capacity can change when the household changes.

Don’t Rush to “Fix” the Traditional IRA

Maybe you receive $1 million of traditional IRA assets in the settlement.

You immediately think:

“I need to get this converted.”

Not necessarily.

First we need to understand:

• Your income
• Your tax situation
• Your cash reserves
• Your housing plan
• Your retirement date
• Your Social Security plan
• Your pension
• Your healthcare
• Your projected RMDs
• Your legacy goals

Then we decide whether conversion improves the projected result.

Example: Before Divorce Versus After Divorce

Imagine you’re 61.

The marital retirement assets include:

• $1.6 million traditional retirement accounts
• $300,000 Roth accounts
• $500,000 taxable assets

The divorce is expected to be finalized this year.

We could compare:

Scenario A: No Roth conversion before the retirement assets are divided.

Scenario B: A measured conversion before the divorce is finalized, coordinated with the legal and tax plan.

Scenario C: Divide the retirement assets first, then each former spouse evaluates separate Roth conversions.

Scenario D: One former spouse converts after the division while the other doesn’t.

Scenario E: Both former spouses use different multi-year conversion schedules based on their separate finances.

Then compare what actually happens to each person’s retirement.

What Should Be Compared?

Potential variables include:

• Traditional IRA balances before and after division
• 401(k) and employer-plan balances
• Roth balances
• Expected filing status
• Conversion amounts
• Conversion years
• Projected conversion taxes
• Available cash
• Housing expenses
• Support payments when applicable
• Investment income
• Social Security
• Pensions
• Medicare considerations
• Future RMDs
• Retirement income
• Beneficiary goals
• Legacy goals

How Can Roth Conversion Taxes Be Addressed After Divorce?

If the analysis supports a Roth conversion after the retirement accounts are properly divided, the tax-funding decision becomes part of the new individual retirement plan.

Option 1: Outside Cash or Taxable Assets

Outside assets may be used to address taxes generated by Roth conversions.

This can allow more of the selected conversion amount to reach or remain inside the Roth.

But post-divorce liquidity deserves special attention.

You may have significant retirement wealth while also needing cash for housing, emergencies, healthcare, and rebuilding your financial life.

Option 2: Retirement Assets or Withholding

Another approach may involve retirement assets or withholding.

This can reduce the amount ultimately reaching or remaining inside the Roth and may create additional tax considerations.

The transaction should be coordinated with the appropriate tax professional before execution.

Option 3: Contractual Carrier Bonus Value

When suitable, certain annuity contracts may provide contractual carrier bonus value that can be included in the broader economic comparison.

In some modeled scenarios, contractual carrier bonus value may economically offset some or potentially all of a conversion-tax cost over the strategy period.

This may potentially reduce the need for additional personal out-of-pocket cash from an overall economic standpoint.

The carrier does not assume your IRS tax liability.

A carrier bonus isn’t an IRS tax credit.

Your tax remains your responsibility.

Bonus terms, vesting, surrender provisions, liquidity restrictions, charges, participation rates, caps, spreads, crediting methods, income features, guarantees, and other contractual provisions need to be evaluated.

This Is Where Roth Blueprint Software Comes In

A divorce can make an old retirement projection nearly useless.

The assets changed.

The household changed.

The expenses changed.

The tax assumptions changed.

The retirement goals may have changed too.

Using our Roth Blueprint software, we can assess thousands of potential modeled Roth conversion scenarios using your new financial picture.

The goal isn’t to preserve the old married-couple strategy.

The goal is to determine what works for the person you are financially after the divorce.

What Can We Compare?

We can assess different:

• Post-divorce traditional retirement balances
• Roth balances
• Conversion amounts
• Conversion starting years
• Multi-year conversions
• Variable annual conversions
• Years with no conversion
• Projected conversion taxes
• Different approaches to addressing conversion taxes
• New retirement expenses
• Housing costs
• Outside liquidity
• Social Security timing
• Pension income
• Investment income
• Potential healthcare-related income considerations
• Projected RMDs
• Retirement income
• Beneficiary outcomes
• Legacy outcomes

Example: Rebuild the Plan for One Person

Suppose you’re 62 after the divorce.

You now have:

• $1.1 million traditional IRA
• $150,000 Roth IRA
• $275,000 cash and taxable investments
• No mortgage
• Social Security planned later
• A pension beginning at 65

We might compare:

Scenario A: No Roth conversion.

Scenario B: Smaller conversions while preserving more cash.

Scenario C: Larger conversions before the pension begins.

Scenario D: Variable conversions before Social Security and future RMDs become more significant.

Scenario E: A multi-year strategy that deliberately preserves a larger post-divorce emergency reserve.

Then we compare:

• Projected taxes
• Traditional IRA balances
• Roth balances
• Future RMDs
• Retirement income
• Liquidity
• Potential Medicare considerations
• Beneficiary outcomes
• Legacy outcomes

Now the Roth conversion is serving your new retirement plan instead of a marriage that no longer exists.

The Retirement Math Method™

This is why we use our Retirement Math Method™.

I don’t start with:

“Convert before the divorce.”

I don’t start with:

“Wait until after the divorce.”

Both are assumptions.

We identify the retirement assets.

We identify who is expected to own them.

We account for the new income and liquidity picture.

Then we run the scenarios.

Maybe converting before the divorce produces the stronger modeled result when properly coordinated.

Maybe dividing the accounts first wins.

Maybe smaller conversions after divorce win.

Maybe one spouse should convert while the other shouldn’t.

Maybe waiting until retirement wins.

Maybe doing nothing wins.

I don’t try to sell you on the strategy. I make the strategy prove itself with the math.

Let the math do the talking.

Frequently Asked Questions About Roth Conversions and Divorce

Should I convert my IRA to Roth before my divorce is final?

Don’t make that decision without considering how the retirement assets will be divided, who may bear the conversion tax, expected filing status, post-divorce income, liquidity, and each spouse’s separate retirement plan.

Can an IRA be transferred to my ex-spouse without tax?

A qualifying transfer of an IRA interest to a spouse or former spouse under a divorce or separate-maintenance decree or qualifying related written instrument can generally be tax-free. The transferred interest is then generally treated as the recipient’s IRA.

Can I withdraw money from my IRA and give it to my ex-spouse?

You can physically take a distribution, but that isn’t necessarily a tax-free transfer incident to divorce. A traditional IRA distribution can create taxable income for the IRA owner and potentially additional federal tax when applicable.

Do I need a QDRO to divide an IRA?

IRAs and qualified employer retirement plans have different divorce-transfer rules. QDROs generally apply to qualified employer plans, while IRA interests are transferred under applicable IRA divorce-transfer rules.

Can a QDRO be used to divide a 401(k)?

A QDRO can give a qualifying alternate payee rights to all or part of benefits under an applicable qualified retirement plan, subject to federal law and the plan’s procedures.

Are Roth and traditional IRA dollars worth the same in divorce?

They can have different future tax characteristics. A traditional IRA generally contains amounts that may be taxable when distributed, while qualified Roth IRA distributions are generally tax-free under current federal rules when applicable requirements are satisfied. Asset valuation in divorce should be handled with appropriate legal, tax, and financial professionals.

Can divorce change how much I should convert?

Yes. Divorce can change filing status, account ownership, income, expenses, cash reserves, retirement timing, Social Security planning, and future RMD exposure. A conversion amount modeled before divorce may no longer fit afterward.

Should I use my settlement cash to pay Roth conversion taxes?

That should be modeled carefully. Settlement cash may also need to fund housing, emergencies, healthcare, legal expenses, and retirement spending. Preserving post-divorce liquidity can be an important part of the decision.

Can Roth Blueprint model a post-divorce Roth conversion?

Our Roth Blueprint process can assess thousands of potential modeled scenarios using post-divorce retirement balances, conversion amounts, taxes, liquidity, Social Security, pensions, healthcare-related income considerations, projected RMDs, beneficiary outcomes, and no conversion.

Don’t Use Your Married Retirement Plan After Your Financial Life Has Changed

This is the main point.

The retirement plan you built as a couple assumed:

Two people.

One household.

One combined balance sheet.

One set of retirement goals.

After divorce, those assumptions may be gone.

Your Roth conversion strategy needs to be rebuilt around the financial life you’re actually going to live.

Going Through Divorce With $500,000+ in Retirement Assets? Let’s Run the Math.

If you’re divorcing or recently divorced and have $500,000, $750,000, $1 million, $2 million, or more in traditional IRAs, 401(k)s, or other tax-deferred retirement assets, don’t automatically carry your old Roth conversion strategy into your new financial life.

When you meet with me, we can use our Roth Blueprint software and Retirement Math Method™ to assess thousands of potential modeled scenarios using the retirement assets you expect to own.

We can compare:

• No Roth conversion
• Conversion timing around the divorce
• Post-divorce conversions
• Smaller annual conversions
• Larger annual conversions
• Multi-year conversions
• Variable annual conversions
• Projected conversion taxes
• Different approaches to addressing conversion taxes
• Post-divorce retirement spending
• Housing costs
• Personal liquidity
• Social Security timing
• Pension income
• Potential healthcare-related income considerations
• Projected traditional balances
• Projected Roth balances
• Projected RMDs
• Retirement income
• Beneficiary outcomes
• Legacy outcomes

Then we put the strategies side by side.

Maybe converting before the divorce wins.

Maybe dividing the accounts first and starting with a clean slate wins.

Maybe smaller post-divorce conversions preserve the independence and liquidity you need.

Maybe waiting until retirement creates the stronger modeled result.

Maybe doing nothing wins.

That’s what you want to know before making a permanent retirement decision in the middle of an already permanent life change.

We don’t sell you a retirement strategy. We run the math and let you decide.

Let the math do the talking.

Schedule Your Roth Conversion Strategy Appointment

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Important Disclosure

This article is for educational purposes only and isn’t intended as individualized tax, legal, accounting, divorce, property-settlement, investment, insurance, Medicare, Social Security, estate-planning, or retirement-planning advice. FPP Financial does not provide tax or legal advice. Divorce laws, property-division rules, community-property rules, retirement-plan rules, QDRO requirements, IRA transfer rules, filing-status rules, beneficiary rules, and tax consequences can vary based on individual circumstances, plan documents, state law, federal law, court orders, and the specific divorce or separation instrument. Under current federal rules, an interest in an IRA transferred to a spouse or former spouse under a qualifying divorce or separate-maintenance decree or qualifying written instrument incident to the decree can generally be transferred without treating the qualifying transfer itself as a taxable distribution, and the transferred IRA interest is generally treated as belonging to the recipient spouse or former spouse after the transfer. Simply withdrawing money from a traditional IRA and paying it to a spouse or former spouse isn’t necessarily treated the same way and can create taxable income and potentially additional tax for the IRA owner. Employer-sponsored retirement plans can be subject to different rules, including qualified domestic relations order requirements when applicable. Do not assume IRA transfer rules and qualified-plan QDRO rules are interchangeable. Roth conversions generally create taxable income to the extent converted amounts would otherwise be taxable. Roth conversions made in tax years beginning after December 31, 2017 generally can’t be recharacterized back to traditional IRA status. Qualified Roth IRA distributions are generally tax-free under current federal rules when applicable requirements are satisfied. Taxable Roth conversion income can affect federal and state income taxes, marginal tax rates, the federal calculation determining how much of Social Security benefits is included in taxable income, ACA Marketplace premium tax credits when applicable, Medicare premiums, estimated tax requirements, liquidity, Net Investment Income Tax calculations in certain circumstances, beneficiary outcomes, and other parts of a financial plan. Required minimum distribution rules vary based on birth year, account type, beneficiary status, and current law. An amount required to be distributed as an RMD for the year isn’t eligible for Roth conversion. Roth conversions can potentially reduce future traditional retirement-account balances and future RMDs relative to an otherwise identical no-conversion scenario, but no specific tax, investment, Medicare, Social Security, RMD, divorce-settlement, retirement-income, beneficiary, liquidity, or legacy outcome is guaranteed. Roth Blueprint calculations and other projections are based on assumptions and information entered into the analysis and aren’t guarantees of future tax results, divorce outcomes, account values, investment performance, retirement income, Medicare premiums, Social Security outcomes, RMD reductions, beneficiary outcomes, legacy results, liquidity, or product performance. Insurance and annuity products may contain fees, charges, surrender periods, liquidity restrictions, eligibility requirements, bonus provisions, participation rates, caps, spreads, crediting methods, income features, guarantees, and other contractual terms. Guarantees are subject to the claims-paying ability of the issuing insurer. A carrier bonus isn’t an IRS tax credit and doesn’t transfer the client’s tax liability to an insurance company. Statements that contractual carrier bonus value may economically offset some or potentially all of a modeled conversion-tax cost aren’t statements that the tax disappears or that the carrier directly pays the client’s tax liability. Before transferring or dividing retirement assets, executing a QDRO, completing a Roth conversion, taking an IRA distribution, changing beneficiary designations, agreeing to a divorce property settlement, using settlement assets to address conversion taxes, purchasing an insurance or annuity product, or making other retirement decisions during or after divorce, consider working with qualified divorce counsel, tax, legal, accounting, financial, investment, insurance, Medicare, Social Security, estate-planning, and other appropriate professionals who can evaluate your individual circumstances and current rules.