Thread: Roth IRA
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Old 10-14-2009, 10:16 AM
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killa k killa k is offline
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Originally Posted by cmdrost View Post
Regular IRAs are still good investment vehicles. It just depends if you need the tax savings now or later.

Regular IRA, you can claim in on your taxes the year you contribute, Roth you can't

But Roth IRA, income comes out tax free, Regular doesn't
Don't forget there are a couple of catches with the "tax free" income from the Roth. 1st, you have to be over 59 1/2 years old. 2nd, the Roth account has to have been established for 5 years. (Can't start it up at 58 and start getting income at 60 and get all the tax privileges.)

2010 would be a good year to talk to your CPAs about converting Traditional IRAs to Roths because there will be a special provision that will allow you to convert and spread the taxes due over a couple of years. Also the normal income limit exclusion will be waived. This would be something to think about especially if you have several years before retirement and don't need the tax break annually OR if you are approaching 70 1/2 and will be forced to take a Required Distribution on you regular IRA, and you know that you will never need it and want to pass it to heirs. Pay the conversion tax now then never take a withdrawal and let it grow for the next generation.

Just my 2 cents.
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