switching your IRA between Roth and regular based on the performance of one stock or one stock's management is not prudent or wise. Your IRA is long term or should be. With the Roth you can withdraw when you want (POST AGE 59 1/2)and how much you choose w/o taxes. You invest in a ROTH with after tax dollars. Conventional IRA contributions are tax deductible but you pay taxes, hopefully at a lower rate, when you withdraw. You also MUST withdraw a certain percentage each year based on your anticipated live expectancy. Personally, I stick with the ROTH.
True, with a traditional IRA you must make annual withdrawals based on actuarial assumptions but you don't have to start making those withdrawals until you are age 70 and a 1/2. Whether to switch or not is a tax strategy. If you have a large position in a stock like ADXS that is risky but could potentially have a huge gain, when you convert to a ROTH matters. I converted to a ROTH within the last couple years during the year when ADXS was a higher price than it at year-end, therefore, I re-characterized back to a regular IRA - if I didn't I would have had to pay taxes on a higher basis of ADXS back then. One can choose to convert to a ROTH IRA now and if the corporate governance issue with ADXS is address and the company lands a meaningful licensing deal in the 2nd half of this year that boosts the company's market value significantly, if you converted to a Roth now you would pay taxes on the lower costs. My point though if Dan continues on the current path and no value is created, then you have the option to re-charterzing back to a regular IRA. In that case, you may choose to convert back to a Roth next year in anticipation that next year we will see meaningful appreciation. In the case of ADXS, consensus is emerging that the science has a promising future, it's just the current management that is the wildcare in terms of whether shareholders will see any value.
I would add the real benefit of moving into a Roth IRA (with the intent of pay taxes on a low cost basis now before the stock appreciates) is the flexibility of re-characterizing it back to a regular IRA until October 15 of the next year without any tax obligation or penalty. So if you convert to a Roth now you have until October 15, 2015 to re-characterize it back to a regular IRA if Dan continues not to deliver shareholder value.
Worst case scenario would be if Prop 2 and Prop 3 passes and Dan gets trigger happy again and does another capital raise say at $2, in March of 2015. If you leave your investment in the Roth you converted this year, you would have to pay 2013 income taxes on $3.19 price (if you converted to a Roth today), however, you have the option to re-characterize it back to a regular IRA then you would have no tax obligation in 2013. I'm confident shareholders will reject Prop 2 and Prop 3 so Dan isn't tempted to do another capital raise at too low a price and instead starts to focused on created shareholder value.
withdrawals from a Roth are tax free. (no worries about your cost basis) Withdrawals from a traditional IRA are taxed. In addition, you incur a tax obligation when you convert to a ROTH from a traditional IRA. i really suggest you consult with your tax advisor
I've converted to a Roth twice in the last couple years, thinking each time I would pay tax on a low cost basis of ADXS before meaningful appreciation. However, given that the price has gone down instead of up, I have re-characterized back to a regular IRA at the year-ends.