How about plan C.Leave the retirement money alone. It is for retirement. Save up some money for grad school, then go once enough has been saved. This would be my first choice. And it's my only recommendation if the grad degree would not pay for itself plus the lost wages while in school. Or plan D.Get a student loan. Those are generally at very reasonable interest rates and at good terms for the borrower.While in school, you could take advantage of the low income year to convert part or all of the traditional IRA to a Roth. I've long been an advocate of waiting for such an opportunity to convert.If you insist on raiding the retirement, here's plan E.Convert in 2010 only the amount needed to pay tuition in 2010. Elect to report the income in 2011 and 2012. Then in 2011, convert the rest (or just more) of the IRA to a Roth. That gets more of the conversion income into 2011 with its lower tax bite.--Peter
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