No. of Recommendations: 0
<<I am considering moving a 6 figure IRA to a Roth IRA, paying income taxes on gains now vs. 14 years from now when I access money. Reason for this is I expect minimum income tax rate in 98. Sooo, what say you fools. I dont know whether to pay Uncle Sam now at 15 percent tax on gains or pay in 14 years at who knows what! Input is much appreciated.>>

You've already received a number of thoughtful responses so I'll just make a couple of points. One is that your decision isn't necessarily to roll or not to roll. You can roll *part* of your IRA if that works as a way to keep most or all of the rollover in the 15% bracket.

People who don't work with taxes all the time are not necessarily familiar with the way tax brackets work. I've included a page on this subject at:

http://www.fairmark.com/begin/bracket.htm

If you expect to be in the 28% bracket when you retire in 14 years, you should benefit from rolling the entire amount provided that you can pay the tax out of non-IRA money.

And it's virtually certain now that the 4-year spread on taxes from a Roth IRA conversion will be elective. The only way this won't happen is if the entire IRS restructuring bill goes down in flames, which is hard to imagine even though there are some disagreements between the House and Senate on some important particulars.

KAT in Chicagoland
http://www.fairmark.com
Tax Guide for Investors
Includes the latest information on
Roth IRA technical corrections
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
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.
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.
Advertisement