Should I Convert To A Roth IRA?

If your income is $100,000 or less and you are single or married, filing jointy, 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 the 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.

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Assumptions

1. Current age
2. Age when income should start
3. Number of years to receive income
4. Before-tax hypothetical rate of return on savings: (% - accumulation phase)
5. Before-tax hypothetical rate of return on savings: (% - distribution phase)
6. Income tax bracket: (% - accumulation phase)
7. Income tax bracket: (% - distribution phase)
8. Current IRA balance
9. Non-Deductible portion of IRA balance
10. How will you pay the conversion tax?
    1) Pay taxes from non-IRA assets
    2) Pay taxes from proceeds of Roth conversion Option 1 Option 2

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