Message Font: Serif | Sans-Serif
No. of Recommendations: 0
A financial advisor recommended that I convert my existing IRAs to ROTH IRAs, so that I could avoid any future penalties. However, I would have to take the 28% penalty to do so now.

I believe the main thing to consider is what tax bracket you will be in when you eventually withdraw money from your IRA. If you expect to be in a higher tax bracket, then it would make sense to pay at the lower rate now. If you will be in a lower bracket, then you should probably keep your IRAs as they are. And if you will be in the same tax bracket, I would think it doesn't matter too much one way or the other. Of course, all this is assuming that you will have money outside of the IRA to pay the taxes for converting now.

Print the post  


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.