Roth IRA Conversion

As a part of our normal review process, we will be reviewing your retirement and IRA accounts with you in the weeks to come. For now, here is a brief “head start” on the issues we will be considering for you in regard to the window this year to convert regular IRA’s and 401(k)’s to Roth IRA’s:

Reasons to convert a traditional IRA to a Roth IRA in 2010:

• You want to pass your IRA income tax free to your heirs
• You have more than 10 years before you need to withdraw substantial funds
• You expect tax rates to be higher in the future
• You have outside assets available to pay the taxes due by 2012
• You would like to dictate your future taxable income
• You do not want to be required to distribute funds at age 701/2
  

Reasons to leave your traditional IRA alone (not to convert):

• You do not have outside assets to pay the taxes due on the conversion
• You have less than 10 years before you will need substantial withdrawals
• You expect your income tax rate will be lower in the future than it is now (?)
• You believe the government may rescind tax free Roth distributions in the future
  

Keep in mind that IF there is a desire to convert a 401(k) balance to Roth IRA, it CAN be done. There are some special considerations to be accomplished with the plan/employer.

We will be completing a simple feasibility study for you at no charge. Upon request, we will also prepare one for friends, parents, business associates who mention your name, at no charge, as a service to you, with no client relationship required.

Please call us if you’d like to discuss things now, otherwise we will be in touch at the normal times. Thanks as always for your business and support.

Jeremy and Lee