Originally Posted by RunningBum
Make sure that's what you really want to do. That's a 20+% tax free return in the Roth that you will eventually be taxed in when you take it out of the tIRA.
assume 20% tax rate for simplicity: have 1.3K in taxable account
1) Leave in Roth; use 1.3K in taxable to pay taxes on Roth so only have 8K in Roth; after N yrs, Roth doubles to 16K
2) Recharacterize to TIRA, so have 8K in TIRA and 1.3K in taxable. After N yrs TIRA doubles to 16K; taxable to 2.6K. After 20% taxes, TIRA is worth
12.8K and taxable is worth 2.4K- for total of 15.2K- (less than the Roth)
Of course, if you withdraw TIRA at lower tax rates, option 2) could come out better so, as usual, depends on assumptions.