Tuesday, November 3, 2009

Roth Conversion in 2010 and Beyond

This article by Richard Kaplan clearly explains the benefits and cost of converting a traditional IRA to a Roth IRA. It is highly recommended.

To Roth or Not to Roth: Analyzing the Conversion Opportunity for 2010 and Beyond

Richard L. Kaplan
University of Illinois College of Law
Bureau of National Affairs Daily Tax Report, Vol. 9, No. 181, September 22, 2009
University of Illinois Law & Economics Research Paper No. LE09-026

Beginning in 2010, all taxpayers will be able to convert their existing Individual Retirement Accounts (IRA) to Roth IRAs, without regard to their level of income or marital status. In effect, taxpayers will be able to lock in current income tax rates on account values that have been eroded by recent investment market declines. This article analyzes who should take advantage of this opportunity, using the barest minimum of arithmetic (and no calculus).

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