Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121150  
Subject: Re: IRA to Roth IRA Date: 2/28/2000 4:58 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
<<First, I converted my 403(b) to an IRA. My wife and I make just about 100k/year. I am almost positive that our total income (certainly our AGI) will be under 100K this year, but it might be the last year this happens until we retire (We are both age 35). Should we convert to a Roth now while we can?>>

There are a number of issues involved in this decision. And it's simply impossible to provide any guidance without additional information (more information than you could EVER provide here). But you can read some of my thoughts on the matter in my article on "should you convert" in the Taxes FAQ area.

<< We will probably be in a higher tax bracket at retirement, but I am not sure. I am not sure what variables are even important so that I can make predictions.>>

I discuss some of them in the Taxes FAQ area.

<< I am also not sure if I can afford to pay the 20% ($5,600) right now.>>

The tax on conversion will likely be GREATER (perhaps much greater) than the 20% withholding that might be taken from your distribution.

But I can say that most tax and financial pros agree that if you don't have "other" funds with which to pay the conversion taxes, then converting isn't necessarily a good idea. If you use the IRA to pay the conversion taxes, you get caught in a "catch 22" where only part of your IRA is converted, and the balance used to pay the taxes will also be subject to taxes AND penalties.

<< Second, if I have positions in my portfolio, can I move them without selling?>>

Yup..

TMF Taxes
Roy
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
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