Thread: Good Time to Convert Traditional to Roth IRA

Originally Posted by tsptalk

With account balances down, and before Obama raises the capital gains tax, it seems this would be an ideal time, tax-wise, to do a conversion from traditional to Roth IRA.

Agree / disagree?

You must have been reading my mind. I have my guy doing that 12/31. Traditionals will be a bust after the new administration starts getting TAX happy! Good Call on this one!

Originally Posted by tsptalk

With account balances down, and before Obama raises the capital gains tax, it seems this would be an ideal time, tax-wise, to do a conversion from traditional to Roth IRA.

Agree / disagree?

This is a good call Tom...

Wife and I already have Roth's but YES good time to switch. Try to get a roth where you have control or somewhat control of asset allocation.

I have a regular as well as a Roth IRA with thinkorswim. There are as many choices for the Roth as there are for the regular IRA (stocks, mutual funds, etfs, options, etc).

Capital gains tax, if returned to the 15% rate will still be lower than some people's regular income tax rate. Plus, all calculations for the deficit assume that the income tax rates return in 2012 to what they were before the Bush Administration. Roth IRA is taxed as income, so YMMV.....

Regarding Roth! Tom, et. al., for those TSP'ers who have separate Roth IRAs that they transferred into Roth from traditional IRA in 2010 or 2011 for that matter....REMINDER! This is the last week to recharacterize those transfers... if your value has gone down since you transferred!!
see the article below for more details, but the bottom line is that Oct. 17, 2011 is a key deadline!
http://www.myfederalretirement.com/public/952.cfm

Thanks for the info!