There’s a lot of lingo in financial services, just as there can be in many other technical industries.

Here are simple explanations of a few terms that people find confusing:

Roth IRA Conversions

Many people confuse a Roth IRA conversion with a Roth IRA contribution. The two are very different.

The conversion happens when you take all that pre-tax money you’ve been contributing to your retirement account and move it into a Roth IRA. You’ll pay income taxes immediately on the money you transfer but it can grow tax-free from that point forward. You can convert as little or as much money as you’d like. There’s no cap…for now, at least. There’s talk on Capitol Hill about eliminating or capping conversions so it may be smart to act now while the opportunity still exists.

We’re happy to help you determine if a conversion is in your best interest. Just contact us and we’ll set up an appointment.   

Fiduciary

Have you heard this word used to describe a financial advisor but didn’t know what it meant? A fiduciary is a professional who is obligated to make decisions that are in the best interest of their client regardless of how much the fiduciary is being compensated. To be clear, an advisor doesn’t haven’t be a fiduciary to do a good job for you, but it’s important to know whether they are one. Everyone in our office who meets with clients is a fiduciary.

In the world of financial services, ignorance is not bliss. We want all Johnson Brunetti clients to know what they’re investing in and why. So, please ask us for definitions and explanations of terms or concepts you don’t understand. We’re happy to help.