01-04-2006, 05:35 PM
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 Re: should I convert 403b to ROTH IRA revheck[at]linuxwaves.com wrote: - quote - > Most of my retirement savings are in a tax-deferred 403b
You are absolutely thinking correctly.> account. About half the amount is in employer funded > accounts, the other half in my own supplementary > contributions. > Through a confluence of deductions, in 2006 I will be in the > lowest 10% tax bracket. > Given that I will probably never be in this low bracket again, > does it make sense for me to convert some of my 403b funds to > a ROTH IRA? My crude understanding is that I can convert my > supplementary contributions to a standard IRA and then to a > ROTH conversion IRA, taking the tax hit this year when my rate > is low. > Am I thinking about this correctly? You must convert first to the regular IRA from the 403b. Then converting as much as you can while still at 10% is a no-brainer, great idea. Depending where you'll land during retirement, you may want to convert well into the 15% bracket. Your decision. Keep in mind, when you leave IRA money to your children when you pass, they will be able to take withdrawals over their lifetime. Paying tax now at 10 or 15% instead of them having to pay at 28-35% is a great favor you can do them. Also, as you get older and the RMD (required minimum distributions) increase, the Roth IRA is not counted in that number, you can take it when needed, no forced RMD. JOE << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#-1
01-04-2006, 04:32 AM
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| should I convert 403b to ROTH IRA Most of my retirement savings are in a tax-deferred 403b account. About half the amount is in employer funded accounts, the other half in my own supplementary contributions. Through a confluence of deductions, in 2006 I will be in the lowest 10% tax bracket. Given that I will probably never be in this low bracket again, does it make sense for me to convert some of my 403b funds to a ROTH IRA? My crude understanding is that I can convert my supplementary contributions to a standard IRA and then to a ROTH conversion IRA, taking the tax hit this year when my rate is low. Am I thinking about this correctly? Thanks in advance. << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
| Tags |
| 403b, convert, ira, roth |
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