Show Me the Money

, By Steven E. Trytten

What's the payoff for converting to a Roth IRA?

By Steven E. Trytten

Advisors recommending Roth IRA conversions had better be prepared to answer these questions from clients: “For years, you've told me that I should postpone income taxes on my retirement plan as long as possible. Now, you tell me I should do a Roth IRA conversion and pay all of the income tax immediately. Why do this Roth conversion? What's the payoff?”

Come 2010, there's no income limitation to stop people from converting a traditional IRA or other qualified retirement account into a Roth IRA. The question then becomes, how should they do it? (See “Want To Convert to a Roth IRA?” p. 26.)

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