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[[Hi, everyone. I have a converted Roth and a contributory Roth and will soon roll over a 401k into
another Ira. The question is should I convert the 401k money into another Roth Ira (yes I know you
have to first convert to traditional and then Roth). And yes I can pay the taxes due with money
outside of the Ira. I like the idea of converting in 98 because I get to spread the taxes out over a 4
year period, but I also like the idea of having 2 different types of Ira's (roth and traditional) so that if
the Congress changes the Ira laws in the future one Ira might be better than the other and thus by
having both types I am covering my behind in a sense. Any ideas? Thanks, Bryan]]

You can't outguess the Congress, Bryan. If it makes sense for YOU to make the conversion, I'm not sure that I would try to second guess what may happen in the future. My crystal ball just isn't that good.

I must admit that I have a personal bias: when it comes to taxes, my mantra is generally: defer, defer, defer! The new capital gains rates of 20% have tempered that view somewhat, because I'm not sure that we'll ever see a capital gains rate less than 20% (but I sure hope I'm wrong).

But I'm just not a big proponent of paying real tax dollars today, for the hope and promise that I'll get tax free dollars in the future. I'm sure that Bill told Monica that he loved her. Get my point?

As has been pointed out here in the past, many times there are very compelling reasons to convert to a Roth and pay the tax today. But I just believe that way too many people are jumping in without seeing if there is any water in the pool. I get that sense because of all of the clients that have shown an interest in Roth conversion, I would guess that we have really only converted about 10% of them. The other 90% had compelling reasons why they should NOT convert...but might just have gone ahead anyway if they didn't have an objective person to talk to.

So if you have already done your homework, and find that the conversion is the best way for you to go, then you might just want to jump in. On the other hand, if it makes sense for you to retain some funds in a regular IRA account (for reasons OTHER than the potential changes that Congress may or may not inact in the future), then keep the regular IRA account.

Others may disagree. Perhaps some other Fools will weigh in and provide some additional insight.

TMF Taxes

SPECIAL NOTE: Remember that this response is not the "last word" on your situation. It is really only a starting point. Make sure to review the "Read This First" post
( for additional information. In addition, many of your questions may already be referenced in the Taxes Frequently Asked Questions area. In order to visit the Taxes FAQ area, go to the Fool's Money area ( and check out "Tax FAQs" in the list box, OR you can jump directly to the Taxes FAQ area ( Additionally, if any references were made to the IRS Web Site, you can get there by pointing your web browser to (
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