Skip to main content
No. of Recommendations: 0
Gary, you wrote:

Some more information on our situation. I have roughly 5K in a deductible traditional IRA. I believe my wife has about 3K in a deductible IRA. Her pension has not yet been put into any type of IRA. Last year we paid a federal income tax rate of 21.25% on our taxable income. We are planning on together putting $4K annually in our IRA's. I am 40, my wife is 37.

If it is not advisable to convert a deductible IRA into a ROTH, is it still advisable to open a new IRA as a ROTH?


Note that you have to do the analysis to see if the conversion to a Roth is to your benefit. Given your ages, in your case it might be the smart move. BUT - You have to run some numbers to be sure. As to a contributory Roth IRA, to me that's a no-brainer. A $2K after-tax deposit to a Roth IRA will beat a $2K deductible deposit to a traditional IRA every time. Yes, it costs extra up front due to the taxes, but that extra money compounds tax-free and can be taken out tax-free. That makes it all worthwhile over the long run.

Regards….Pixy

Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.