Comments on: Is now the time to convert? http://www.bluntmoney.com/is-now-the-time-to-convert/ Thu, 13 May 2010 17:59:11 +0000 hourly 1 http://wordpress.org/?v=3.0 By: bluntmoney http://www.bluntmoney.com/is-now-the-time-to-convert/comment-page-1/#comment-45170 bluntmoney Wed, 19 Nov 2008 23:47:18 +0000 http://www.bluntmoney.com/is-now-the-time-to-convert/#comment-45170 Holly and boots, thanks, your comments give me more to think about. Bruce, of course your comments do too, but I wanted to explain about the non-deductible contributions. If I remember right (it's been awhile) they're non-deductible because I was covered by an employee retirement plan at the time and the deductible portion was phased out due to income. I think. Holly and boots, thanks, your comments give me more to think about.

Bruce, of course your comments do too, but I wanted to explain about the non-deductible contributions. If I remember right (it’s been awhile) they’re non-deductible because I was covered by an employee retirement plan at the time and the deductible portion was phased out due to income. I think.

]]> By: Bruce http://www.bluntmoney.com/is-now-the-time-to-convert/comment-page-1/#comment-45166 Bruce Wed, 19 Nov 2008 22:22:04 +0000 http://www.bluntmoney.com/is-now-the-time-to-convert/#comment-45166 Given your situation and with what you have said, First I have this for you. Ask about this at your bank. (If they do it all for you and if there are fees for it, they are deductible- the fees). I am a bit curious how your Traditional IRA contributions were/are non-deductible. But any-ma-whos-its, when you convert Traditional IRA to Roth, keep in mind or the thought - "Roth IRAs are pre-taxed, meaning the income is taxed before you put it in, thus so when you take it out (at retirement) it is tax free except for what it earned." When clients I have had in the past have converted from Traditional to Roth they had to pay taxes on the income. They don't have to pay the penalties for early withdrawal. Given your situation and with what you have said, First I have this for you. Ask about this at your bank. (If they do it all for you and if there are fees for it, they are deductible- the fees).

I am a bit curious how your Traditional IRA contributions were/are non-deductible. But any-ma-whos-its, when you convert Traditional IRA to Roth, keep in mind or the thought – “Roth IRAs are pre-taxed, meaning the income is taxed before you put it in, thus so when you take it out (at retirement) it is tax free except for what it earned.”

When clients I have had in the past have converted from Traditional to Roth they had to pay taxes on the income. They don’t have to pay the penalties for early withdrawal.

]]> By: boots586 http://www.bluntmoney.com/is-now-the-time-to-convert/comment-page-1/#comment-45164 boots586 Wed, 19 Nov 2008 20:57:42 +0000 http://www.bluntmoney.com/is-now-the-time-to-convert/#comment-45164 My thinking was the same as yours-making lemonade out of the drop in the stock market lemons. Both my IRA and Roth are with TD Ameritrade so I went to my local office and they did the paperwork for me on line. They thought it would take several weeks to take effect but it only took three days. Of course, the market has kept going down and down since I did my conversion. I should have waited, but who knew? They will be sending me tax forms at the end of the year so I will know how much I will owe. I am still glad that I did the conversion as I did not want to pay taxes on my Roth distributions. My thinking was the same as yours-making lemonade out of the drop in the stock market lemons. Both my IRA and Roth are with TD Ameritrade so I went to my local office and they did the paperwork for me on line. They thought it would take several weeks to take effect but it only took three days. Of course, the market has kept going down and down since I did my conversion. I should have waited, but who knew? They will be sending me tax forms at the end of the year so I will know how much I will owe. I am still glad that I did the conversion as I did not want to pay taxes on my Roth distributions.

]]> By: Holly http://www.bluntmoney.com/is-now-the-time-to-convert/comment-page-1/#comment-45162 Holly Wed, 19 Nov 2008 19:22:50 +0000 http://www.bluntmoney.com/is-now-the-time-to-convert/#comment-45162 I actually asked my financial planner about converting my Traditional IRA to Roth IRA back in January. At that time he told me that the IRS will be changing the rules relating to that (I can't remember when but I think it was in 2010) and that it made more sense to wait until then because it wouldn't be taxable for me. So for now my IRA is still traditional. I definitely plan to convert it though. I actually asked my financial planner about converting my Traditional IRA to Roth IRA back in January. At that time he told me that the IRS will be changing the rules relating to that (I can’t remember when but I think it was in 2010) and that it made more sense to wait until then because it wouldn’t be taxable for me. So for now my IRA is still traditional. I definitely plan to convert it though.

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