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First off, I am a huge advocate of funding a Roth with your $3,000 allotment each year. The reason? All the money inside is YOURS. Any capital gains or dividends you see is YOURS, not split between you and Uncle Sam.

Now, I have a TIRA as a result of rolling over a 401(k) into an IRA. I have left it sitting there until a time when it seems prudent to roll it over into a Roth. I think that time may be this year. I wanted to bounce a few ideas off of everybody here and get some comments.

First, a little background about me. I am currently toward the upper end of the 25% tax bracket, and don't see myself heading towards the 15% anytime in the foreseeable future. I am single, but even if I got married, I still find it unlikely that I would fall below the 25% level.

Second, I currently have ~$11k in the TIRA that would be the amount I am considering rolling over.

I did a cursory review of Publication 590 on IRAs, and couldn't find anything directly related to rolling over from a TIRA to a RIRA. I'm sure it's there somewhere, but I couldn't find it.

The way I understand it, when you roll over from a TIRA to a RIRA, you basically withdraw the funds from the TIRA, put them back into a RIRA, and then pay taxes at your marginal tax rate. For example, if I moved $10,000 from a TIRA to a RIRA, all $10,000 would be in the RIRA, but my tax liability would have just increased $2,500. Is that correct? If so, the idea would be to roll over as much $$$ as possible without moving into a different tax bracket, right?

Now, here's my thoughts on why this year might be the "perfect" year to roll over to a Roth.

1. Given that the 28% tax bracket starts at $68,800, I am very close to pushing that envelope with my income plus the ~$11k that I'm rolling over.

2. I don't think income taxes are going to get any lower. If Kerry gets elected, they will be on the rise probably (don't want to get into a political debate here, just stating the facts as I see them).

Things I am still debating:

1. The market has been on the rise lately, but will probably stay where it is for a few months (IMHO). I only get taxed on the total value of my TIRA at the time of rollover, right? So, I would theoretically hope for a bear market and then rollover a devalued amount to minimize taxes. I guess this would fall under "market timing" so maybe I should just wait for a specific dollar amount before rolling over (like $10k resulting in a $2,500 tax, right?). Your thoughts on this?

2. I am currently 28, and am looking at roughly a 30-year time span for tax rate fluctuations. Are income tax rates bottomed out in your opinion? The evidence I point to is our huge deficit we're running right now...something's gotta give eventually.

3. I currently live in Texas where there are no state or local income taxes. While I don't anticipate on moving anytime soon, anything can happen over a time span of decades.

4. Did I mess up any of the technicalities above? Do I actually understand the rollover process correctly?

5. Who is actually going to read this far down into this post.

Thanks in advance for your thoughts and input!

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