Ask Arlene
Welcome to Arlene Brown's
Roth IRA Conversion
Educational Blog
Friday, July 31, 2009
What is a Roth IRA ?
A Roth IRA is an Individual Retirement Account. It came into being when it was sponsored by Senator William Roth, and became a law as part of the Tax Relief Act of 1997.
With the introduction of Roth, there are now two types of savings vehicles that are called IRA. The traditional is still referred to as an IRA; the recent plan is referred to as a Roth IRA. While contributions to a Traditional IRA are made with pre tax dollars and earnings to be tax deferred until retirement. With Roth IRAs, contributions are made on an after-tax basis, but earnings are not taxed and qualifying distributions are tax free.
With the introduction of Roth, there are now two types of savings vehicles that are called IRA. The traditional is still referred to as an IRA; the recent plan is referred to as a Roth IRA. While contributions to a Traditional IRA are made with pre tax dollars and earnings to be tax deferred until retirement. With Roth IRAs, contributions are made on an after-tax basis, but earnings are not taxed and qualifying distributions are tax free.
Monday, June 29, 2009
Are Taxes Going Up
Saturday, February 7, 2009
CBS 60 MINUTES: ARE TAX RATES GOING UP?
Anyone who thinks their tax rates will be higher in the future should consider converting to a Roth IRA.
Anyone who thinks they won't should watch this this 60 MINUTES segment that aired March 4, 2007From CBSnews.com:As correspondent Steve Kroft first reported earlier this year, he is the nation's top accountant, the comptroller general of the United States. He's totaled up our government's income, liabilities, and future obligations and concluded that our current standard of living is unsustainable unless some drastic action is taken. And he's not alone. It's been called the "dirty little secret everyone in Washington knows" – a set of financial truths so inconvenient that most elected officials don't even want to talk about them, which is exactly why David Walker does.Click this link to go CBSnews.com where you can watch this 60 MINUTES segment
http://www.cbsnews.com/stories/2007/03/01/60minutes/main2528226.shtml
Read more...
CBS 60 MINUTES: ARE TAX RATES GOING UP?
Anyone who thinks their tax rates will be higher in the future should consider converting to a Roth IRA.
Anyone who thinks they won't should watch this this 60 MINUTES segment that aired March 4, 2007From CBSnews.com:As correspondent Steve Kroft first reported earlier this year, he is the nation's top accountant, the comptroller general of the United States. He's totaled up our government's income, liabilities, and future obligations and concluded that our current standard of living is unsustainable unless some drastic action is taken. And he's not alone. It's been called the "dirty little secret everyone in Washington knows" – a set of financial truths so inconvenient that most elected officials don't even want to talk about them, which is exactly why David Walker does.Click this link to go CBSnews.com where you can watch this 60 MINUTES segment
http://www.cbsnews.com/stories/2007/03/01/60minutes/main2528226.shtml
Read more...
Retire Without Taxes
Friday, February 13, 2009
COVER STORY
RETIRE WITHOUT TAXES
Suppose you could earn tax-free returns on your retirement savings. Suppose you could collect tax-free income after you quit working — and even pass along these tax-free payouts to your heirs. You'd jump at that trifecta, right? Then why haven't you? With a Roth IRA and its workplace counterpart, the Roth 401(k), you can get all three valuable benefits in one investment. But what's holding you back could be confusion. Roths present you with a minefield of eligibility requirements, tricky tax twists and arcane withdrawal rules. That's where MONEY's guide comes in. Their 12 questions and answers will tell you everything you need to know to make a Roth the cornerstone of a rich, secure retirement.
Sunday, June 28, 2009
To Convert or Not to Convert - ROTH IRA CONVERSION
2010 - The Roth IRA conversion option allows qualifying taxpayers to electively convert some or all of their traditional IRA, SEP, SIMPLE, 401(k), 403(b), or 457(b) savings to Roth IRA . The taxpayer must include the taxable portion of the traditional savings in his or her taxable income in the year of conversion. But once the traditional assets are converted, all future growth within the Roth IRA accumulates on a tax-free basis (assuming the Roth IRA owner takes “qualified distributions”).
Since 1998, Roth IRA conversion option has historically been available only to households with $100,000 or less of Modified Adjusted Gross Income (MAGI). In other words, access to Roth IRA conversions has been limited to those taxpayers who are the least likely to be in a financial position to take advantage of it. But that’s all scheduled to change. Thanks to a little-publicized provision in the Tax Increase Prevention and Reconciliation Act (TIPRA) of 2005, the income restriction on Roth IRA conversions is set to be lifted as of January 1, 2010.
Since 1998, Roth IRA conversion option has historically been available only to households with $100,000 or less of Modified Adjusted Gross Income (MAGI). In other words, access to Roth IRA conversions has been limited to those taxpayers who are the least likely to be in a financial position to take advantage of it. But that’s all scheduled to change. Thanks to a little-publicized provision in the Tax Increase Prevention and Reconciliation Act (TIPRA) of 2005, the income restriction on Roth IRA conversions is set to be lifted as of January 1, 2010.
Subscribe to:
Posts (Atom)
