Show Me the Money 2009Show Me the Money 2009
Advisors recommending Roth IRA conversions had better be prepared to answer these questions from clients: For years, you've told me that I should postpone income taxes on my retirement plan as long as possible. Now, you tell me I should do a Roth IRA conversion and pay all of the income tax immediately. Why do this Roth conversion? What's the payoff? Come 2010, there's no income limitation to stop
September 1, 2009
Steven E. Trytten
Advisors recommending Roth IRA conversions had better be prepared to answer these questions from clients: “For years, you've told me that I should postpone income taxes on my retirement plan as long as possible. Now, you tell me I should do a Roth IRA conversion and pay all of the income tax immediately. Why do this Roth conversion? What's the payoff?”
Come 2010, there's no income limitation to stop people from converting a traditional IRA or other qualified retirement account into a Roth IRA. The question then becomes, how should they do it? (See “Want To Convert to a Roth IRA?” p. 26.)
But perhaps most importantly, we have to answer: Does the Roth make financial sense?
To help calculate the bottom line, here are a few cas...
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