These retirement savings accounts, which are often pitched to young investors, can be a good option for older and retired workers.
At 72, Janice Campbell might not seem like your average investor in a Roth account. Those investment vehicles — funded with after-tax dollars instead of the pretax contributions that go into most individual retirement accounts and 401(k)s — are typically recommended for younger workers.
Taxes are paid on the money before it is contributed to the account. For those just starting out their careers and earning entry-level wages, the appeal is paying taxes at a lower rate than they are likely to be at in another 20 or 30 years. This money grows, tax-free, until retirement, at which point withdrawals also are tax-free.
But Ms. Campbell, a retired tech worker who is still active and healthy, frequently hiking trails around her Arizona home, is concerned about how her health could change in the coming years and whether she might face the expense of long-term care.
“I think it’s important at our age not to put the burden on our children or grandchildren,” Ms. Campbell said. So, at the recommendation of her financial adviser, she recently decided to change her investment mix and is converting a portion of her retirement savings into a Roth I.R.A.
“Chances are, I won’t need that money until later and it can just grow,” she said.
Advisers like Andrea Clark, who works with Ms. Campbell, say that contributing or converting funds into a Roth account can yield significant tax- and estate-planning benefits for older workers and retirees.
Ms. Clark, owner and founder of the Table Financial Planning, based in Fountain Hills, Ariz., said a Roth account offered the flexibility of having a tax-free bucket of funds that they could dip into for large or unplanned expenses.