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My husband recently accepted a new job and is now looking at rolling-over the 401K from his old company. Currently, it is valued at about $20,000. I am wondering what are the pros and cons of choosing a traditional IRA vs a ROTH. We can pay the taxes out of pocket for the ROTH conversion, but I'm not sure it's worthwhile to pay for a tax-free benefit that may or may not be available by the time we retire in 35+ years. Any thoughts?

- Beth
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I don't see the connection between the 401(K) rollover to the new employer and your questions about a traditional vs. Roth IRA...unless you are contemplating rolling the former 401(k) to your TIRA and then perhaps do a conversion.

But to your question: There are a couple of advantages of a Roth conversion. First, if your marginal tax rate in retirement (combined state and fed) will be equal to or greater than your current rate, then it is likely worth your while to convert, because, second, the Roth IRA will not be subject to minimum required distributions, you can continue to add to it if you have earned income later in life and if you still have your Roth when you expire, your heirs can continue to enjoy its tax free withdrawals.

As to contributions, if you can deduct your TIRA contributions, this is often seen as preferrential to the after tax contributions to your Roth. But if you can't deduct the TIRA contributions, then contributing to your Roth should be a no-brainer.

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