UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next
Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75540  
Subject: Re: Year End Roth Conversions Date: 12/10/2004 5:51 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 4
Author: pauleckler | Date: 12/10/04 2:20 PM | Number: 43506
For those who are retired and still have traditional IRAs, its a good idea to check your tax situation before the end of the year. If you still have some of the 15% tax bracket un-utilized, doing a Roth conversion to consume the rest of that bracket can be a good idea.

Very good idea!

One caveat for people over the age of 55: If you establish a Roth by doing a conversion from a Traditional IRA, you have to wait 5 years before you can make penalty-free withdrawals of any of that money, even if that means you will be over 59.5..

Example: You are 59 when you establish your Roth with a partial conversion from a traditional IRA. You can't make penalty-free withdrawals until you are 64 from this new Roth IRA. However, if you had left this money in your Traditional IRA, you can withdraw it at any time after 59.5 without penalty (of course you always pay ordinary income tax).

If you roll money from a Traditional IRA into a Roth IRA that has been previously established, there is no 5 year waiting period. The waiting period is only from the time the Roth is established. So, the message is, establish a Roth as soon as possible.

Russ
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Post of the Day:
Value Hounds

Kate Spade's Wild Ride
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement