Top 3 Reasons to Convert to a Roth
By Meredith StoudtPosted on April 4th, 2009
Top 3 Reasons to Convert to a Roth
Roth IRAs are taxed when you contribute to them instead of when withdrawals are made. This year, anyone can convert their Traditional IRA to a Roth. Why would you want to?
1. You aren’t forced to take Required Minimum Distributions
2. If you believe your tax rate is going up
You should compare your tax rate upon conversion to the rate you will pay in the future on the IRA withdrawals. The higher tax brackets are going to see an increase starting next year.
3. Decrease Estate Taxes
Federal estate taxes are in flux, but Ohio’s estate tax of 6% kicks in on estates over $338K in value. Paying your income taxes in advance decreases the size of the estate to be taxed- but it maintains the after tax value.