CNBC has this interesting column laying out some rules of thumb to consider if you’re contemplating converting a regular IRA into a Roth IRA. The columnist’s 6 rules of thumb are:
- Convert to a Roth if you will be in a higher tax bracket later
- Convert to a Roth only within your current tax bracket
- Convert to a Roth only in the state you know you will be for life
- The sooner in the year the better
- Concentrate the stock positions in the Roth and the conservative positions in the traditional IRA
- Set up different Roth IRAs at the same time (and use varying investment strategies for them)
What do you think? How does a traditional IRA compare to a Roth IRA? When does a Roth IRA conversion make sense? How have you handled your retirement portfolio?
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(c) 2013, Stephen M. Johnson, Esq.