Comments on: The Roth IRA and Retirement Taxes http://gotoretirement.com/2009/09/roth-ira-retirement-taxes/ A Baby Boomer's Journey from Retirement Planning to Retirement Living Thu, 18 Mar 2010 17:39:32 +0000 http://wordpress.org/?v=2.9 hourly 1 By: Britt http://gotoretirement.com/2009/09/roth-ira-retirement-taxes/comment-page-1/#comment-1567 Britt Thu, 10 Sep 2009 18:44:37 +0000 http://gotoretirement.com/?p=3663#comment-1567 Excellent point on 2010 Roth IRA conversions. As of now, the window for conversion is open-ended, but if the government thinks it's losing future revenue, it might change the law. On the flip side, given the current decrease in federal tax revenue, the government might welcome early taxation of IRA's through the conversion process, so it might opt to keep the law unchanged well into the future. Either way, if you're considering a Roth, now's the time to take advantage! Excellent point on 2010 Roth IRA conversions. As of now, the window for conversion is open-ended, but if the government thinks it’s losing future revenue, it might change the law.

On the flip side, given the current decrease in federal tax revenue, the government might welcome early taxation of IRA’s through the conversion process, so it might opt to keep the law unchanged well into the future.

Either way, if you’re considering a Roth, now’s the time to take advantage!

]]> By: Mr. GoTo http://gotoretirement.com/2009/09/roth-ira-retirement-taxes/comment-page-1/#comment-1566 Mr. GoTo Thu, 10 Sep 2009 17:13:53 +0000 http://gotoretirement.com/?p=3663#comment-1566 Brian: I think if you run an investment return analysis, you will find that you end up with the same number after taxes with a Roth IRA or conventional IRA, if the tax rates stay the same. So the real question is whether you can effectively Roth withdrawals to lower your overall tax burden when you retire, taking into account other taxable income you will have. If you are certain that your tax burden will be lower when you retire under any circumstances, the Roth is no help. Brian: I think if you run an investment return analysis, you will find that you end up with the same number after taxes with a Roth IRA or conventional IRA, if the tax rates stay the same. So the real question is whether you can effectively Roth withdrawals to lower your overall tax burden when you retire, taking into account other taxable income you will have. If you are certain that your tax burden will be lower when you retire under any circumstances, the Roth is no help.

]]> By: Brian http://gotoretirement.com/2009/09/roth-ira-retirement-taxes/comment-page-1/#comment-1565 Brian Thu, 10 Sep 2009 16:52:51 +0000 http://gotoretirement.com/?p=3663#comment-1565 Doesn't the ultimate question regarding converting an IRA to a Roth, will the 33% loss of funds that I could invest today, going to be larger than that future tax savings I would receive? I have both a Roth and an regular IRA, I think having both make sense, and I think if you have a small IRA you should convert, or if you are adding new $$$ you should put into a IRA...but if you have 10+ years of savings, growth, or 401K money in a IRA, I am very skeptical that taking a heavy hit today, is a good move. Especially if you are in a state with income taxes (43 of the 50 do). Open to thoughts and continuing the discussion. Doesn’t the ultimate question regarding converting an IRA to a Roth, will the 33% loss of funds that I could invest today, going to be larger than that future tax savings I would receive?

I have both a Roth and an regular IRA, I think having both make sense, and I think if you have a small IRA you should convert, or if you are adding new $$$ you should put into a IRA…but if you have 10+ years of savings, growth, or 401K money in a IRA, I am very skeptical that taking a heavy hit today, is a good move.

Especially if you are in a state with income taxes (43 of the 50 do).

Open to thoughts and continuing the discussion.

]]>