In a recent “Mesirow Monday” segment on WGN’s Your Money Matters with Jon Hansen, Mesirow Wealth Advisor Andrew Mutlu, CFP^®, APMA^® discussed the role Roth assets can play in retirement planning and outlined several strategies available to investors seeking greater tax diversification.

During the conversation, Mutlu explained the key differences between traditional retirement accounts and Roth accounts. While contributions to traditional retirement accounts are generally made on a pre-tax basis and taxed upon withdrawal, Roth assets are funded with after-tax dollars, allowing qualified future growth and withdrawals to be tax free.

Mutlu emphasized that maintaining a mix of taxable, tax-deferred and tax-free assets can provide retirees with greater flexibility when managing income and taxes in retirement.

The discussion also addressed common misconceptions about Roth accounts, particularly among higher-income earners who believe they are ineligible to contribute. Mutlu highlighted the potential use of a backdoor Roth strategy, which may allow certain individuals above the Roth IRA income limits to indirectly fund a Roth account, subject to IRS rules and individual circumstances.

In addition, Mutlu noted that many workplace retirement plans offer a Roth 401(k) option, which is not subject to the same income limitations as Roth IRAs. He encouraged savers to review their employer-sponsored retirement plans and consult with financial and tax professionals to determine the most appropriate strategy.

For retirees and others without earned income, Mutlu discussed the potential benefits of Roth conversions, whereby assets from traditional IRAs may be converted to Roth accounts, allowing future growth and qualified withdrawals to be tax free.

"Tax diversification is an important component of a comprehensive retirement plan," said Mutlu. "Whether through direct contributions, Roth 401(k) savings, backdoor Roth strategies, or Roth conversions, many investors have opportunities to build tax-free assets that can provide flexibility later in life."

At Mesirow Wealth Management, the firm’s Wealth Advisors provide personal, comprehensive planning that integrates investment management with tax-aware strategies, estate planning considerations and long-term financial planning. By taking a comprehensive view of each client’s circumstances, the firm helps individuals and families navigate complex financial decisions with clarity and confidence.

Mesirow Wealth Management is the firm’s founding capability, connecting clients to what matters today and across generations. Learn more at mesirow.com/wealth.