harley
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
OK, I've decided to convert my existing tIRAs to Roths over the years. I'll convert as much as I'm able to each year without jumping into the next tax bracket. I've made up my mind, I've thought out my reasons, and I've started the process for this year. No need to try to talk me out of it.
However, I'd like to know what potential problems I might be facing in the future. I hope to never need the money from the Roths, but maybe I will need to withdraw at some point. If not I'll pass it on to my heirs sometime in the (hopefully far) future. This and the increased tax rates I foresee are my main reasons for doing the conversions.
When discussing this with my financially minded buddy, he suggested that I might end up losing if the US implements a VAT. I could see that as being a method of taxing income from a Roth, but it seem to me you'd still be ahead of a tIRA, where the income would be taxed, then the VAT added to any purchases. I guess if they do away with income tax and replace it with a VAT it could be a problem.
However, are there any other possibilities y'all can think of? Other than removing the Roth tax-free option? Even if they do, I can't see them getting away without grandfathering in the existing ones. Feel free to be creative. I like to worry.
However, I'd like to know what potential problems I might be facing in the future. I hope to never need the money from the Roths, but maybe I will need to withdraw at some point. If not I'll pass it on to my heirs sometime in the (hopefully far) future. This and the increased tax rates I foresee are my main reasons for doing the conversions.
When discussing this with my financially minded buddy, he suggested that I might end up losing if the US implements a VAT. I could see that as being a method of taxing income from a Roth, but it seem to me you'd still be ahead of a tIRA, where the income would be taxed, then the VAT added to any purchases. I guess if they do away with income tax and replace it with a VAT it could be a problem.
However, are there any other possibilities y'all can think of? Other than removing the Roth tax-free option? Even if they do, I can't see them getting away without grandfathering in the existing ones. Feel free to be creative. I like to worry.