Message Font: Serif | Sans-Serif
No. of Recommendations: 0
I came across an article, which I will endeavour to find again, that argued against Traditional IRA's and even 401K's(except in the case of the rapidly disappearing company matching funds).

The main point of the article was that the BIG assumption with T-IRAs and 401Ks, is that we will be paying LESS taxes when we retire and start withdrawing from them, therefore, saving us from paying higher taxes overall. Yet, in view of the massive debt this country has accumulated, exacerbated by the wave of bailouts and budget deficits recently seen, can we realistically expect to pay less taxes in the future on a lump on money we have accumulated with taxes deffered on it? Many people, myself included expect to have to work to make ends meet during retriement. It is hard to see how taxes will go down in the future for anyone. Isn't it better to pay the taxes now on your retirement monies and watch it grow knowing that it will be all yours?

If we also add in, the fact that many of us have recently seen our taxable incomes greatly reduced or eliminated in some cases.
The balance of your Tax deferred investments have generally tanked along with the stock market. This implies they will hopefully grow again in a bull mkt increasing the taxable amount when the time comes to withdraw for retirement.

Are these points sufficient to justify a massive conversion of T-IRA's to Roth IRAs? Isn't this something EVERYONE should take a look at right now?

For my part, I did it last late year. My gross income was a mere 27K, the net sum of my IRA+401k was just 13K after the 30%+ beatting they took in 2009. I also got married that year and expect to have significant medical expense deductions for insurance premiums and expenses and job seeking expenses. I'm only 43 so I've go a ways to go before MRDs and all that, but I wanted to see what others thought of this...If you have the article I'm refering to, please link it.
Print the post  


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.
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.