No. of Recommendations: 0
Greetings, Jtpowell, and welcome. You asked:

<<In 1998 I rolled a 401(k)into a mutual fund as a traditional IRA. I do not, nor plan to, contribute funds to this acct., as I have a new 401(k)/profit-sharing plan with my current employer. My plan is to just let this small amount of money ($1,400.00) grow until retirement. My question is this: Should I turn this into a Roth and take the tax hit on it now so that I can withdraw it tax-free at retirement? It seems that it would be the wat to go, but any advise would be greatly appreciated.>>

Normally, I'd say that the decision to convert to a Roth depends on a number of factors such as your tax rate today versus that of tomorrow, how you will pay the income taxes due on the conversion, how long the money can stay in the Roth, the size of your potential estate, etc. In this case the amount is relatively minor. Therefore, assuming you have ten or so years until retirement and that you will pay the taxes due from money outside the IRA, then IMHO conversion to a Roth will probably provide you more benefits than leaving the money in a traditional IRA or transferring it to your new employer's 401k plan (assuming the plan accepts rollovers of old 401k plan money).

Print the post  


The Retire Early Home Page
Discussion on accelerating retirement day.
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 Glassdoor #1 Company to Work For 2015! 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.