bulletHomebulletAttorney Profile & AwardsbulletRecommendationsbulletEstate Attorney ServicesbulletBusiness Attorney ServicesbulletTax Attorney ServicesbulletLegal Guides Written By Steven J FrommbulletTax NewslettersbulletLinks & FeedsbulletContact Us 215-735-2336
menu
Roth Conversionspage item

Email Me LinkedIn Facebook WordPress Twitter RSS Feed

Roth Conversions: Pros and Cons

Factors To Consider When  Deciding Whether to
Convert an IRA to a Roth IRA Account

Written by: Steven J. Fromm, J.D., LL.M. (Taxation)

Consider Converting

You should consider converting to a Roth IRA if the following apply to your situation:

  • You expect your tax rate to be higher in retirement
  • Low income Year: If you have a relatively low income, it could make good sense to convert some or all of your IRA balance to Roth. This could come about if you have variable income (such as commission income, farm income or sales) and you have a year where your expected taxable income will be lower by average than other years. It is key to have outside (non-IRA) funds available for paying the additional tax.
  • You do not think you will need the money for living expenses
  • Your investment horizon is long enough to benefit from the tax-free growth of a Roth IRA
  • You can afford to pay taxes on the conversion using separate funds.
  • Estate Planning: There may be various reasons to convert for estate planning.  For example, if you don’t expect to use the IRA funds for your own purposes in retirement and you’d like to pass along the money to your spouse or heirs tax-free, conversion to Roth will eliminate the income tax burden for such beneficiaries.

Consider Not Converting

You should probably not convert your IRA in the following situations:

Run Projections and Get Professional Guidance

The above are just some of the issues to consider here.  In addition, you should meet with a tax attorney or your tax accountant to run various income, cash flow and tax projections to determine with more certainty which option to consider. 

Copyright © 2011 - Steven J. Fromm & Associates, P.C., 1420 Walnut Street, Suite 300, Philadelphia, PA 19102. All rights reserved.

Jonathan Weiss:  "Steve is an excellent attorney who has provided help for my family personally for business, tax, and other services for many years. He is extremely knowledgeable and thorough, and is extremely good at explaining legal concepts to me in clear terms understandable to a non-attorney. It is difficult to pick only three attributes above, since Steve’s work meets most if not all of the attributes above.”

HomemenuAttorney Profile & AwardsmenuRecommendationsmenuEstate Attorney ServicesmenuBusiness Attorney ServicesmenuTax Attorney ServicesmenuLegal Guides Written By Steven J FrommmenuTax NewslettersmenuLinks & FeedsmenuContact Us 215-735-2336
Loading
Search
Probate, Wills, Trusts, Estates, Business Attorney
Philadelphia Business & Estate Planning Attorney
Money for Lunch
Wills, Trusts Articles As Featured On EzineArticles
Philadelphia Business and Corporate Attorney
Loading
Search
Probate, Wills, Trusts, Estates, Business Attorney
Philadelphia Business & Estate Planning Attorney
Philadelphia Business & Estate Planning Attorney
Tax, Corporate, Business Attorney Martindale Hubbell AV Preeminent Award 2011
Wills, Trusts, Estate Planning Attorney AV Preeminent Peer Review Award 2010
Money for Lunch
Philadelphia Business and Corporate Attorney
Business Network Pennsylvania. Yellow Pages: directory and catalog for your company, products and services.
Wills, Trusts Articles As Featured On EzineArticles
Philadelphia Business and Corporate Attorney