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Aug 1, 2011 12:00 PM
Taking Another Look at Roth IRAs
2011 and 2012 may be good years to consider conversions for tax, retirement and estate planning benefits
As the U.S. economy continues its sluggish recovery, and despite the turbulence and uncertainty of the global economy, there's a tremendous planning opportunity for many of our clients in 2011 and 2012. Since last year, the income limitations that had previously prohibited many investors from converting their traditional individual retirement accounts to Roth IRAs were removed. Now, virtually anyone, no matter what his income, can convert a traditional IRA into a Roth IRA and potentially receive tax-free distributions in retirement (based on an appropriate holding period and age).
Leading up to the income limitation changes in January 2010, many financial planners anticipated a boom in Roth conversions, but because of the uncertainty with tax rates that would have expired at the end of 2010, many investors remained on the sidelines. With the passage of The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Act), which extended the existing income, capital gains and dividend tax rates through 2012, investors finally received the clarity they needed.
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Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
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