To Roth or Not To Roth?
Posted on April 8, 2010
Filed Under Personal InvestingA new survey finds that while most Baby Boomers are aware of their ability to convert individual retirement account assets to a Roth IRA, few intend to do so.
Specifically, the research, from mutual fund company USAA, found that of the Boomers surveyed, 70% do not plan to make a conversion in 2010.
The top reason given (44%) for not converting was the feeling that their income tax rates will be lower in retirement and they do not want to pay higher taxes by converting funds now. And since you have to pay taxes up front when you switch to a Roth, 27% said they wouldn’t do it because they are not able to pay the taxes that would be due on the converted money.
I have read lots about this convert/don’t convert topic, and here’s the main conclusion I’ve come to – there are few black and white answers. Trying to guess what tax rates will be down the road, or what you own financial situation will be, is a shot in the dark.
So my advice to you is to do some basic research, or ask your accountant, and make a decision. And then relax.
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