Poll-Are You Doing A Roth Conversion?

[heyyou]

Yes and thanks

Since ER, I've been converting for 4 years by topping off the 15% bracket while I'm too young for SS.

That looks bad to some since it is prepaying tax. To me it is just pushing money (perhaps tax free) into the future, continuing the delayed gratification that got me to the best years of my life, my FIREd years.

There is always risk in anything. Conversion is a type of diversification. I'm reducing some of my risk of paying higher taxes in the future.

 

[chinaco]

I have not begun conversion yet... but intend to do so.

I would recommend that anyone considering it do a thorough study of the rules to identify the considerations that are meaningful to them in the context of their circumstances.

It is helpful to setup several what-if scenarios in a spreadsheet to understand how to optimize one's plan.

Someone on this forum recommended Ed Slott's books. They are good primers.


Someone also recommended ORP... which includes the conversion scenario as a net income optimizer.


These two sources of info were very helpful.

Thanks to the forum members for sharing this information!

 

[TromboneAl]

My computer reminds me to convert in early January (for the upcoming year). Since all gains will never be taxed (as income anyway), this gives you a full extra year of appreciation for free. Same for HSA contributions.

Skeptical? Let's say that your funds go up by 100% in 2011. If you convert 10K on Jan 2, your Roth will have 20K in it that will not be taxed. If you convert on Dec 30, you will have 10K of gains left behind in your trad IRA which will be taxed when you withdraw it.

That's why I always tried to make my IRA and SEP-IRA contributions early in the year.

 

[perrytime]

haven't been able to find a job for 2 years now, no income, so i converted up to point of paying taxes. one silver lining to awful situation.