Roth IRA Conversion

With the recent changes in tax law, income limits on the Roth IRA conversions will be removed in 2010 and you may be eligible to convert your Traditional IRA or 401(k) account to a Roth IRA. Previously, Roth conversions were limited to clients with adjusted gross income of less than $100,000. Also there is a one time opportunity available on Roth conversions done during 2010 wherein you may be able to spread your Roth conversion tax liability over two years - 2011 and 2012.

If eligible, you may enjoy these benefits:

• Tax-free withdrawals: Roth IRA withdrawals are tax-free after age 59 ½ as long as you have held the account for at least five years.

• No required minimum distributions (RMD) at age 70 ½: Unlike Traditional IRA and 401(k) plans, Roth IRAs are exempt from RMD rules during the life of the IRA account owner.

• Tax diversification: By converting to a Roth IRA, you may have more flexibility to manage your taxable income in retirement.

• Estate Planning

Also See:

• Roth IRA -  How it Works

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