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Subject:  Re: Pixy's 1/9 Conversion to a Roth. Date:  1/10/2001  7:13 AM
Author:  TMFPixy Number:  27075 of 96908

Greetings, Meadogal, and welcome. You wrote:

I am a big fan of Motley Fool and always enjoy Pixies
articles. However on this particular article it does
nothing for someone over 59 1/2. I want to convert my
IRA to a Roth, especially since the market has been so
unstable that the taxes to convert would be considerably less. If I don't I will have to take it in 4 yrs. At this point I won't be needing to use it.
Would that be a good move? I am in the 15% bracket and have not contributed to it for 6 yrs.

That's utterly impossible for anyone to say based on the information you have provided. You know your situation, so only you can run those numbers. It could very well make sense to convert now. If you do, will you stay in the 15% bracket when the conversion is added to your other taxable income? Can the money stay in the Roth for five tax-years before you touch any of the earnings? Are you confident that paying your taxes today will lessen the overall tax burden to you (and possibly your heirs) in the future? If so, then it's entirely possible that conversion now makes sense. If not, then it's entirely possible conversion would be a wrong move. Only you can make the necessary assumptions about the future and run the numbers to make the necessary comparisons.

FWIW, I have seen few conversions for those older than 59 1/2 that do make sense from an overall taxation perspective. Those that do generally apply to those who do not need the money in the IRA for income.

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