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Retirement

Should I Convert To A Roth IRA?

Good (38 Ratings)

2.68421/5

If your adjusted gross income is $100,000 or less and you are not a married individual filing separately, you may be eligible to convert your traditional IRAs to a Roth IRA in order to take advantage of federally tax-free earnings in the future. You will generally pay ordinary federal income tax (but not a 10% penalty tax) on the taxable amount that is converted. Your tax-free potential is maximized if you pay the taxes from your current income or personal savings, not your IRA.

Savings and Assumptions	Input
Current age	(1-99)
Age when income should start	(1-99)
Number of years to receive income	(1-30)
Before tax return on savings: (% - accumulation phase)	(0-12)%
Before tax return on savings: (% - distribution phase)	(0-12)%
Income tax bracket: (% - accumulation phase)	(0-50)%
Income tax bracket: (% - distribution phase)	(0-50)%
Current IRA balance	$
Non-Deductible portion of IRA balance	$
How will you pay the conversion tax?	1) Pay taxes from non-IRA assets 2) Pay taxes from proceeds of Roth conversion

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Conversion Phase	Traditional IRA	Roth IRA
Current IRA balance: (deductible)
Current IRA Balance: (non-deductible)
Side account
Roth conversion amount: (before-taxes)
Taxes and fees paid at conversion
Adjusted beginning comparison balance

Accumulation Phase	Traditional IRA	Roth IRA
Projected IRA balance: (deductible)
Projected IRA balance: (non-deductible)
Projected side account
Projected Roth IRA balance
Projected value at retirement: (before-taxes)

Distribution Phase	Traditional IRA	Roth IRA
Yearly income: (deductible)
Yearly income: (non-deductible)
Side account income
Roth IRA income
Annual after-tax income
Monthly after-tax income

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  Loan Type	Today	Last Week
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  30 Year Fixed Jumbo	7.26%	7.36%
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