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Updated: 11:02 PM Oct 12, 2009
To convert or not to convert your IRA
Financial advisors say the tax laws are changing in January of 2010, and that has people looking at converting IRA's into Roth IRA's. Posted: 6:13 PM Oct 12, 2009Reporter: Sarah Stokes Email Address: sarah.stokes@weau.com |
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Uncle Sam is giving you a possible tax break next year on your retirement account.
In this "On the Money" report, financial advisors say they're expecting a rush of people who want to convert their traditional IRA's into Roth IRA's.
Financial planners say starting in 2010, people can convert their IRA's to Roth IRA's, and wait to pay the taxes on it until 2011 and 2012. They say it's a tax law change that starts January 1, 2010.
Experts say the benefits of a Roth IRA over a traditional IRA are that if you make money over time, it's tax free and the money you take out is also tax free, (in most cases) but whatever money you convert now, will be taxed and could affect student aid.
Donna Murr, a LarsonAllen Financial Senior Wealth Advisor, says "it's not a slam dunk that you're going to want to convert so even though the road is open for everyone to look at this, it's very important people look at their situation their financial goals are, the estate planning goals and objectives are incorporate into this strategy."
Financial advisors say if you decide to convert in 2010, you can change your mind a year to 18 months later.
To learn more, click here.
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