Delawaredave5
Full time employment: Posting here.
- Joined
- Dec 22, 2004
- Messages
- 699
Any logic in converting 401k to Roth after leaving employer ? Friend of mine was asking - left Megacorp at 50, plans to ER at 58.
Most folks would be in lower tax rate upon retirement - so I don't understand benefit of converting now.
What's "plan to leave savings to their heirs" mean ? I guess Roth money gets transferred to heirs with no estate tax ? What's the tax treatment on regular IRA money ? Thanks !
Few savers plan to switch to Roth IRA: survey - MarketWatch
Given the potential benefits of a Roth -- contributions are made after-tax, but distributions including any investment earnings come out tax-free as long as certain conditions are met -- investors at least should consider such accounts, said Chris McDermott, vice president of retirement and financial planning at Fidelity Investments.
"If investors have at least 10 years before making withdrawals, anticipate a higher tax rate in retirement or plan to leave savings to heirs, they should consider a conversion," he said.
Most folks would be in lower tax rate upon retirement - so I don't understand benefit of converting now.
What's "plan to leave savings to their heirs" mean ? I guess Roth money gets transferred to heirs with no estate tax ? What's the tax treatment on regular IRA money ? Thanks !
Few savers plan to switch to Roth IRA: survey - MarketWatch
Given the potential benefits of a Roth -- contributions are made after-tax, but distributions including any investment earnings come out tax-free as long as certain conditions are met -- investors at least should consider such accounts, said Chris McDermott, vice president of retirement and financial planning at Fidelity Investments.
"If investors have at least 10 years before making withdrawals, anticipate a higher tax rate in retirement or plan to leave savings to heirs, they should consider a conversion," he said.