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Author: RBMunkin 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 294  
Subject: Trad ira vs roth ira Date: 4/1/2006 9:59 AM
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Hi
It occured to me recently that one could contribute to a traditional IRA in a high income year to take advantage of the tax deduction in a high tax rate year, and then convert it to a Roth IRA in a year when ones tax rate is lower, thereby paying a lower tax on the amount and getting the advantage of no tax when it's time to distribute.

Is this a sound idea or can anyone punch holes in it?

I'm thinking of recharacterizing my Roth IRA contributions for 2005 to a Traditional IRA to get the tax deduction for 2005, a high income year, and then I can roll it over to a Roth in a low income year.

I'm also thinking of rolling over my SEP IRA to a Roth in 2006, a low income year for me.

Comments?
Thanks,
RB
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