Forums :: Resources :: Features :: Photo Gallery :: Vintage Radio Shows :: Archives
Support This Site: Contributors :: Advertise


It is currently May Sun 24, 2020 11:26 pm


All times are UTC [ DST ]





Post New Topic Post Reply  [ 14 posts ] 
Author Message
 Post subject: converting to roth
PostPosted: Mar Tue 24, 2020 10:51 pm 
Member

Joined: Nov Wed 14, 2007 11:37 pm
Posts: 1638
The thought popped into my head. Would this be a good time to convert a traditional IRA to a Roth IRA? My reasoning: Sell the IRA and let the short term loss balance the long term gain. Buy into a Roth IRA within 60 days. Pay less tax than if the market was up. Does this sound right or am I dreaming up the wrong creek?


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Wed 25, 2020 12:28 am 
Member

Joined: Jul Sun 26, 2015 11:34 pm
Posts: 887
Location: Hurdle Mills, North Carolina
I would say leave it alone and put new money in a Roth.

_________________
Larry in NC


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Wed 25, 2020 1:28 am 
Member

Joined: Dec Wed 25, 2013 7:57 am
Posts: 4290
Location: USA
metzman wrote:
...Would this be a good time to convert a traditional IRA to a Roth IRA?
Yes! Your analysis is correct.

Clarification: It's not "sell" then "buy." It must go directly from the Regular IRA account to the Roth account. The cash value of the transfer is taxed as ordinary income. Capital gains tax rates (gain/loss, short term, long term) don't apply to IRA accounts. Before pulling the trigger, I would calculate the exact amount of tax and make sure funds are available.

You would have to mail or fax in the form. I would expect many investment firms are now inundated with these requests.


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Wed 25, 2020 1:58 am 
Member
User avatar

Joined: Sep Mon 18, 2017 2:23 am
Posts: 5197
Location: Plymouth, MI
Make sure you run the numbers first, it may be a great idea or a bad one depending on your situation.

_________________
Dan

Museum Curator
https://roaringtwentiesantiqueradiomuseum.com/


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Wed 25, 2020 3:05 am 
Member

Joined: Dec Wed 25, 2013 7:57 am
Posts: 4290
Location: USA
atwaterkent1 wrote:
Make sure you run the numbers first, it may be a great idea or a bad one depending on your situation.

Definitely agree. There are many moving parts...


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Wed 25, 2020 3:39 am 
Member
User avatar

Joined: Jan Thu 01, 1970 1:00 am
Posts: 15294
Location: S. Dartmouth MA 02748-1225 USA
IMHO See a professional, Rolling over accounts is possible. What makes it a better time is not the market but how old you are and what the plans are for the money, goals...

There are two different kinds of financial managers. Those that take from your portfolio as a fee.. Those that are paid agents of investment groups. I chose the latter after dabbling with my 401k and seeing some slip through my fingers. Investment groups have far greater investment savvy than any one individual has and apply this millisecond by millisecond to the market. I get quarterly reports of the trades. I have no idea where the information comes from for them to make the trades. None the less it happens, 20-50 pages of this stuff. I keep for a year then recycle. Yes I can see the portfolio online, yes I can change some strategic parameter. But I cannot out think what they do.

Das machine is nicht fur gerfingerpoken und mittengrabben

I will PM a link to this group if you wish...

Chas

_________________
List' & I will Enchant Thine Ear


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Wed 25, 2020 4:47 am 
Member
User avatar

Joined: Sep Mon 18, 2017 2:23 am
Posts: 5197
Location: Plymouth, MI
If you don't have financial experience Chas is absolutely correct, get with someone who knows investing. If you do that its also good to go with a flat fee for service advisor, they usually charge a 1% fee for their services. Above all, make sure he is a Certified Financial Planner (CFP), someone who has been certified by the Certified Financial Planner Board. The board sets standards that must be met before a financial advisor is certified.
When I met my wife she was being ripped off by an agent for a major insurance company. He was paid by commission and was churning the account (buying and selling stocks for no reason other than to generate commissions). I sicked my lawyers on him and his company, they quickly coughed up a settlement returning the money they had cheated her out of.

_________________
Dan

Museum Curator
https://roaringtwentiesantiqueradiomuseum.com/


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Wed 25, 2020 7:58 pm 
Member
User avatar

Joined: Mar Wed 11, 2015 1:46 am
Posts: 1321
Location: Boiling Springs, PA
This is timely:

https://www.marketwatch.com/story/a-sil ... =home-page

_________________
Jeff-W3JKO

https://ornerscorner.neocities.org


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Wed 25, 2020 8:37 pm 
Member

Joined: Jan Thu 01, 1970 1:00 am
Posts: 5682
Location: Rochester NY USA
The recent change in the law gave me two more years before making minimum withdrawals from my IRA. My first thought was to withdraw only what I could without owing taxes. Then I realized I could move the same amount to a Roth this year and next - this year's could have been timed better, still negative, but it's a long-term investment. Kind of a no-brainer when I could do it with no tax due.

_________________
My web page: https://bit.ly/2rxq4qx


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Wed 25, 2020 8:47 pm 
Member

Joined: Dec Wed 25, 2013 7:57 am
Posts: 4290
Location: USA
Tom,

Maybe you meant it this way. Money leaving a regular IRA account, whether withdrawn or converted to Roth is taxed as ordinary income that same year. When you said "no tax due," maybe you were thinking there's no "extra" tax.

That's a pretty good article. Thanks for the link Jeff.


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Wed 25, 2020 10:11 pm 
Member

Joined: Jan Thu 01, 1970 1:00 am
Posts: 5682
Location: Rochester NY USA
Many retirees have income below the standard deduction - taking IRA withdrawals or making Roth conversions up to the standard deduction is really a no-brainer! For instance, if couple has $64,000 Social Security income, they can have an additional $18,000 in taxable income before any Federal tax is due. With $44,000 of Social Security, they can have $22,000 more without owing tax.

_________________
My web page: https://bit.ly/2rxq4qx


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Fri 27, 2020 6:07 pm 
Member

Joined: Nov Wed 14, 2007 11:37 pm
Posts: 1638
Quote:
Many retirees have income below the standard deduction - taking IRA withdrawals or making Roth conversions up to the standard deduction is really a no-brainer! For instance, if couple has $64,000 Social Security income, they can have an additional $18,000 in taxable income before any Federal tax is due. With $44,000 of Social Security, they can have $22,000 more without owing tax.


Thanks for all the replies. Now I realize that capital gains don't come into play in the conversion. My only income if I reach 70 1/2 (another 13 yrs to go), will be social security, with no pension, then IRA and 401k RMDs, and then skimming cap gains distributions, and dividends from regular mutual funds. It may turn out better to not worry about converting because I anticipate a rather meager income at that point.


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Fri 27, 2020 7:08 pm 
Member

Joined: Dec Wed 25, 2013 7:57 am
Posts: 4290
Location: USA
Metzman,

In that case, the first reply to your initial post may be appropriate. Just stash away as much as possible into Roth IRA and 401k for the next 14 years. One feature of Roth is that no matter how much it grows, there's no tax when you withdraw: you keep 100%. Also it's whenever, as much/little as you want...no RMD when you turn 72 (new RMD age).


Top
 Profile  
 
 Post subject: Re: converting to roth
PostPosted: Mar Sat 28, 2020 1:48 am 
Member
User avatar

Joined: Sep Mon 18, 2017 2:23 am
Posts: 5197
Location: Plymouth, MI
Stash in the 401K only up to the match if there is one, then fund the Roth.

_________________
Dan

Museum Curator
https://roaringtwentiesantiqueradiomuseum.com/


Top
 Profile  
 
Post New Topic Post Reply  [ 14 posts ]  Moderator: Alan Voorhees

All times are UTC [ DST ]


Who is online

Users browsing this forum: Barry H Bennett, Dan's Radio Room, Findm-Keepm, pauls.ironhorse, Peter, Todd Electron and 16 guests



Search for:
Jump to:  


































-->


Privacy Policy :: Powered by phpBB