The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing

URL:  http://boards.fool.com/in-comparison-converting-to-a-roth-would-shield-30817726.aspx

Subject:  Re: IRA to Roth IRA Conversion Date:  8/9/2013  1:00 AM
Author:  GLlacuna Number:  72743 of 76078

In comparison, converting to a Roth would shield any capital gains or investment income from future taxes.


AJ - this is the heart of my wanting to employ a strategy of converting from a traditional IRA to a Roth.

I'm only 50 so there will be no withdraws from my IRA's for quite a while. The responses were all very helpful. But at the heart of the strategy is this:

Traditional IRA balance of $200K, for simplicity lets assume it grows in value (investment growth & Dividends) by $100K between now an when I start to withdraw. I will pay taxes on the $300K as its withdrawn from the IRA.

Roth Conversion - of the $200K I pay taxes on the $200K now at conversion(I would do this over a few years and minimize the tax rate.) Am I correct that the $100K of growth in the Roth IRA, would not be taxable, even when I eventually with draw it??


Is my understanding correct??
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us