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Subject:  Re: Roth IRA transfer Date:  4/27/1998  9:23 AM
Author:  Rayvt Number:  3068 of 98519

Yes, the rollover is definitely going to push you into the 28% or maybe 31% marginal tax bracket for the next four years. But that's not the most important point, IMHO.

If you work out the numbers (accurately! Should go without saying, but most of the comparisons I have seen fail to be accurate), there is NO difference between paying taxes now and paying them in the future (i.e. rollover vs not rolling over), if the tax bracket is the same.
But the present tax is known, and the future tax is an uncertainty. Normally, investors require compensation in order to take on an uncertainty (another name for risk). You are not being compensated in this case. And uncertainties abound.

You might be in a lower tax bracket when you retire. In which case you are paying a large tax now to avoid a smaller tax later on. Dumb!

Congress might change the tax laws sometime between now and 30 years from now. (No! Really??? They would never do THAT, would they??) You might well pay the tax now _and_ pay a tax (probably an indirect tax rather than a direct one) in the future.

Give this a lot of thought before you take the leap. Remember, if you decide to not rollover, you can always chage your mind later and do it. But if you rollover now, you can never change your mind an undo it.


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