To Roth or not Roth? 44% are undecided.
In January investors in retirement plans with incomes over $100,000 will for the first time have the opportunity to convert their individual retirement accounts, or IRAs, to Roth IRAs. Have you figured out whether it’s right for you?
A survey by TD Ameritrade of 1,000 retail investor clients found that 44% of those with a retirement savings account that could be converted to a Roth IRA said they are still undecided on whether they would convert.
From my perspective, the decision should be based on whether your taxes will be higher in retirement or higher now. The first hurdle is that it takes a fairly knowledgeable forecast to predict your future taxable income so you can predict your tax bracket. (What other sources of income will you have in retirement?) Then you need to guess what the tax rate will be at that bracket.
I have software that makes the guesswork more manageable. Give me a call if you’d like help working through this decision. We’ll set a fee before the work is started, and I won’t pressure you to move your assets to my management.
Mike Dayoub is a fee-only planner in Alpharetta/Milton and a tax preparer at H&R Block. 770 361-3139 website
