Jan 8

I have a Rollover IRA that has lost half its value. If I convert it to a Roth IRA, I will pay taxes now, but it will grow tax free from now on. Should I convert it now, or should I let it ride, and pay taxes down the road (25 years)?


4 comments so far...

  • v b Said on January 8th, 2010 at 6:24 pm:

    Only you can decide that.

  • Ruby Said on January 8th, 2010 at 6:53 pm:

    If you can convert it, it is probably a great thing to do at this time. Just make sure you meet the income requirements. You will always be better off with 25 years of tax-free growth!

  • Amneris V Said on January 8th, 2010 at 7:00 pm:

    Check out this online calculator, it will answer your question:

    http://www.smartmoney.com/personal-finance/retirement/roth-iras-to-convert-or-not-7965/

  • Chris C Said on January 8th, 2010 at 7:33 pm:

    By converting the money into a Roth IRA you will need to pay taxes on the amount you convert. If you can cover that next year without posing financial hardship to your overall situation you absolutely should do it. I did.

    Also, if the tax bill won’t be too steep, you can convert part of it and wait til next year to do the rest. But I have a feeling the market will recover quite a bit in the next 12 to 18 months.

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