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Author: foolishflyer Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 122924  
Subject: To Roth, or not to Roth... Date: 2/12/1998 7:08 PM
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...that is the question.

I read Roy Lewis's series on the Roth IRA. Someone argued that his analysis on switching to a Roth is flawed. The decision shouldn't be based on tax savings, but maximum return. I was all set to go Roth, but now I don't have a warm fuzzy.

Scenario: I'm 31 and currently contribute to a non-deductible IRA. I have savings now and can save enough later to pay for the taxes owed from converting, without resorting to using money from the IRA to pay. BTW, I'm at 28% tax bracket. Assuming I'm going to be in the same bracket when I retire (a mighty big one at that).

Rolling over to a Roth sounds good. Here's my reasoning: The $2000/year contribution I currently make comes out of my *after tax* paycheck. Therefore, whether non-deductible or Roth, I've paid taxes on the $2000. I make too much to have a tax-deductible IRA. Since the Roth will give me tax free distributions in the future, why not go with it?

OK, someone punch holes in my analysis. Please be kind. I need to know. Am I missing something? I can't sleep at nights.

To sleep, to dream
Aye! There's the rub...

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