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I’m Over 60 – Should I do a Roth IRA Conversion?

September 27, 2012

The answer is simple – it depends. The real answer has nothing to do with your age, but it may have everything to do with how long you want your money to survive. When it comes to accessing these funds, whose needs are greater, you or your IRA beneficiary?

When you convert your traditional IRA to a Roth IRA, you have to pay tax on that money. Therefore, you must have enough savings outside your IRA to pay the tax on the converted amount. If you use the IRA assets to pay the tax, the benefit of converting to a Roth IRA may just about evaporate.

The nice thing about a Roth IRA is that you will not have to face Required Minimum Distributions later, unlike with traditional IRAs. Once you reach the age of retirement, not having to worry about paying tax on withdrawals can make your life much less stressful. Also, anything left to your heirs goes to them tax-free, rather than being taxed in their top bracket.

Prior to 2010, Roth IRA conversions were forbidden for anyone with adjusted gross income over $100,000. However, this restriction is now gone and as a result, you can do a Roth IRA conversion even if you earn more than $100,000. Investors are now taking advantage of this.

At NuView IRA, we give our clients the opportunity to do a Roth IRA conversion, as well as options for self-direction. We let our clients invest in millions of ways they never thought possible. Contact our Florida IRA administration company to learn more about the many ways you can invest in your retirement. Call 407-367-3472 today to learn more about options for your retirement plan.