Message Font: Serif | Sans-Serif
No. of Recommendations: 0
I just finished reading

Like so many Roth articles, it seems to give a misleading assessment of the benefits of Roth conversion.

It completely ignores the lost opportunity of investing money you have to use to pay taxes on the conversion.

The article compares paying $1,120 on a $4,000 conversion versus paying $8,400 in taxes if you don't convert and the $4,000 investment grows to $30,000.

Yeah, but what if you were to invest the $1,120 in and assume the same growth rate, then the $1,120 would become $8,400, which would be enough to pay the taxes. Of course, you have to pay capital gains on $8,400 - $1,120. So, may Roth is better, but no where near as better as the article makes it seem.

Plus, there's other factors like tax bracket at retirement, etc.

I wish TMF would write a more in-depth article that gives a more realistic assessment of Roth conversion.

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.