Conversion of traditional IRA to Roth

[Corcaigh]

Anyone considering this?

When I ran some numbers it seemed to make sense not to convert my IRA, BUT I should put a greater proportion of future investment into a Roth.

[Monte51Coleman]

I'm not converting and I max out my Roth.

[Corcaigh]

I'm not converting and I max out my Roth.

Yeah ... I think I'll just try to max both.

[Monte51Coleman]

Yeah ... I think I'll just try to max both.

At your age the max contribution is 5k total for 2010. Wouldn't you want to put that all into a Roth in years that you don't exceed the income limits?

[techboy]

It makes sense if you can game your income for the year of conversion. We converted my wife's old account a couple of years ago when she was between jobs, and a student, and I had a lot of deductions. Our income was so low that year (tax wise) that we paid little if not nothing on the conversion (I don't remember exactly).

If not, you have to decide whether your income tax rate now is higher or lower than what it will be at retirement. For a person in a very high bracket, I wouldn't think it would make much sense unless one expected cripplingly high tax rates in the future, hard to predict and probably better hedged by keeping some in traditional, and also contributing to a Roth normally.