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I'm debating the worth of converting our 2002 Traditional IRA contributions of $7000 (3500. each) to Roth IRAs. In Jan. 2002 the funds were put into Traditional IRA accounts. Having only worked part of the year, our 2002 contributions meet the income demands for a Roth. We are 60 and retired and will not need this money for a long, long time so the benefits of a Roth appear great. However, not being able to take the Traditional deduction on this year's Federal taxes will cost me $600 more in taxes. So now I'm in a quandry - convert to a Roth or not?

Even though you said "convert," I think you're referring to recharacterizing your 2002 contributions as Roth contributions. Some more information would be helpful:

1. How much total are your IRAs worth?

2. Have you made nondeductible contributions to your traditional IRAs? If so, how much?

3. It sounds like you retired in 2002. Can we assume that your income in 2003 will be less than in 2002?

I'm asking these questions because one option you haven't mentioned is to treat the 2002 contributions as deductible traditional contributions then convert to Roth in 2003.

Phil Marti
VITA Volunteer
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