Headlines about "IRAs"

Gathered from the web by the editors at BenefitsLink.com.
[Guidance Overview] Roth Conversion Reporting
Excerpt: "With the Pension Protection Act of 2006 permitting funds in a qualified plan, 403(b) or governmental 457(b) to be directly rolled to a Roth IRA as of 2008, provided the AGI was under $100,000 and, if married, the taxpayers filed jointly; there have been many questions about reporting these transactions on Form 1099-R. Coupled with the relatively new designated Roth source and the new Roth Conversion rules for 2010, there has been even more confusion about reporting the various transactions on Form 1099-R. [The target page provides] some fact sets and examples of Form 1099-R reporting." (McKay Hochman Co.)

[Opinion] Can the U.S. Government Require You to Get an IRA?
Excerpt: "One of the biggest priorities for the Middle Class Task Force led by Vice President Biden is a push to improve and standardize American retirement planning. This is where the Obama administration can make big changes. But whether average workers or financial service firms and insurance companies will be the chief beneficiaries remains to be seen." (The Washington Post; free registration required)

February 2010 Pension Legislative Outlook: Administration and Congressional Initiatives
Excerpt: "President Obama recently announced his five 'middle class' initiatives. In this article we review two of them -- the automatic workplace IRAs and expanded Saver's Credit proposals. We also provide an update on the other retirement policy issues we've been tracking -- DB funding relief, 401(k) fee disclosure and participant investment advice regulations." (J.P. Morgan)

[Opinion] Obama's Automatic IRA, Annuity Schemes Would Be A Disaster
Excerpt: "'Given that fewer than 5% of the population contributes to personal IRAs, why would they choose to do so in the workplace?' said White, the author of America, Welcome to the Poorhouse. 'What's more, why are America's employee forced to bankroll their own retirement, rather than requiring higher employer contributions?'" (Jane White via Retirement-Solutions, LLC)

Obama Administration Creating Programs to Increase Americans' Retirement Savings and Income
The administration efforts includes a proposed automatic IRA, increased tax credits, guaranteed lifetime income options, and new 401(k) regulations. (AP via msnbc.com)

[Guidance Overview] Roth IRAs: Recharacterization Rules for IRA Contributions
Excerpt: "This [Technical Update] discusses additional rules relating to recharacterization and reconversion of IRA contributions." (SunGard Relius)

[Guidance Overview] Unlike Most Investment Decisions, If Roth Conversion Doesn't Go As Well, You Can Have a 'Do Over'
Excerpt: "[W]hat if a client converts in 2010 and the account continues to lose value after the conversion? The tax due on the Roth IRA is based on the value of the account at the time of conversion, so your client would face a higher tax bill. This is the kind of situation where you can take a 'do over.' The Roth recharacterization rules provide that a poor performing Roth account can be recharacterized back to a Traditional IRA, with no income tax consequences, until as late as Oct. 15 of the year following the year of the conversion." (On Wall Street)

White House Backs Roth IRAs As Default Pension Investment Vehicle
Excerpt: "Retirement savings for workers automatically enrolled in individual retirement accounts under the administration's fiscal-2011 budget proposal would be invested in Roth IRAs -- unless they chose otherwise. That detail about the automatic-IRA proposal emerged today from the administration." (Investment News; free registration required)

Saving to Retire: Should It Be Pre-tax, After-tax or Roth?
Excerpt: "This analysis considers the following three options: Pre-tax (IRA, 401(k)): pre-tax contributions grow tax-deferred; distributions are subject to applicable tax; Taxable ('savings account' or 'side fund'): after-tax contributions are taxable based on the nature of the invested asset and extent of time the asset is held; Roth (Roth IRA, Roth 401(k)): after-tax contributions grow tax-free; distributions are tax-free." (Barry R. Milberg)

Mandatory IRAs May Burden Small Employers, Business Group Says
Excerpt: "'When small businesses are struggling to stay afloat, we oppose mandates such as this that stand to create a new administrative burden,' said Molly Brogan, vice president of public affairs for the National Small Business Association, in an e-mailed statement." (Bloomberg L.P. via BusinessWeek)

Obama to Propose 'Automatic Workplace IRAs'
Excerpt: "The new IRAs are designed for employers that do not currently offer a retirement savings plan. Under the plans, which would be voluntary, employees would be automatically enrolled in a direct-deposit IRA unless the employee opts out. Contributions would be matched by the Saver's Tax Credit for eligible families." (Employee Benefit Adviser; free registration required)

[Guidance Overview] 9th Circuit Rules that ERISA/Code Survivor Protections Do Not Carry Over to an IRA
Excerpt: "Comment: It has long been thought that the ERISA/Code automatic surviving spouse rules do not carry over (or otherwise apply) to an IRA, with respect to amounts transferred to the IRA from a qualified retirement plan (such as a 401(k) plan), or with respect to any other amounts. Thus, the Court's decision is not a surprise. I like the use of the interpleader to resolve disputes over funds and ownership. Allowing the Court to decide the dispute lets the bank or other financial institution avoid paying amounts out of the IRA (or any plan or arrangement at issue) to the wrong individual, and later having to pay the right individual those same amounts out of its own pocket." (Stanley D. Baum of Fellheimer & Eichen LLP)

[Guidance Overview] How to Recharacterize an IRA Contribution
Excerpt: "Recharacterization of an IRA contribution means treating a contribution made to one type (traditional or Roth) of IRA as made to a different type of IRA for the taxable year. An individual may recharacterize all or a portion of an IRA contribution. A taxpayer may recharacterize a contribution made either to a traditional IRA or to a Roth IRA." (SunGard Relius)

12 Traps to Avoid When Converting to a Roth IRA
Excerpt: "'Roth conversions can trigger unintended tax traps and financial problems that are not being addressed in the mounds of 2010 Roth conversion information that currently dominates the media,' Ed Slott wrote recently in his newsletter, 'Ed Slott's IRA Advisor.' These traps may make you reconsider when to convert, how much to convert, or even if you should convert at all. Here are some of the traps that Slott says await the uninformed." (MarketWatch, Inc.)

Retirement Plan Industry Groups Lobby Congress to Allow Roth 401(k) Conversions
Excerpt: "Worried about losing some of the $3 trillion in assets they oversee, defined-contribution-plan administrators have forged a coalition with plan sponsors and retirees to lobby Congress to allow Roth conversions for 401(k) plan participants." (Investment News; free registration required)

Additional Data on IRA Ownership: Appendix to The Role of IRAs in U.S. Households' Saving for Retirement, 2009 (PDF)
20 pages. Excerpt: "The January 2010 issue of Fundamentals covers U.S.households' individual retirement account (IRA) ownership in 2009. The report highlights data collected by the Investment Company Institute in a recent survey of households owning IRAs. This appendix provides supplementary tables with additional detail for the January 2010 Fundamentals." (Investment Company Institute)

The Role of IRAs in U.S. Households' Saving for Retirement, 2009 (PDF)
22 pages. Excerpt: "With $3.7 trillion in assets in mid-2009, individualretirement accounts (IRAs) represented about one-quarter of U.S. total retirement market assets, compared with 15 percent two decades ago. IRAshave also risen in importance on household balance sheets. In June 2009, IRA assets were 9 percent of all household financial assets, up from 4 percent of assets two decades ago. In May 2009, 46.1 million, or 39 percent of, U.S. households reported owning IRAs . . . ." (Investment Company Institute)

[Official Guidance] Text of IRS Notice 2010-15: Guidance Under HEART Act, Including Qualified Reservist Distributions Before Age 59-1/2 (PDF)
27 pages. Excerpt: "The sections of the HEART Act addressed in this notice are section 104 (relating to survivor and disability payments with respect to qualified military service), section 105 (relating to treatment of differential military pay as wages), section 107 (relating to distributions from retirement plans to individuals called to active duty), section 109 (relating to contributions of military death gratuities to Roth IRAs and Coverdell education savings accounts), and section 111 (relating to an employer credit for differential wage payments to employees who are active duty members of the uniformed services)." (Internal Revenue Service)

The Roth Conversion Gamble (PDF)
4 pages. Excerpt: "There are four things that determine whether a Roth conversion is a good idea or not: 1. Whether and how Congress will change the Internal Revenue Code in the future. 2. Whether state taxes will change, either because of revisions in state tax laws or because of relocation to another state. 3. The total amount of taxable income, during the conversion vs. the future. 4. Everything else (impact of required minimum distributions, impact on heirs, etc.). Of these, the latter two can be hard to predict, but the first two are virtually impossible to predict. They are, all but literally, a spin of the roulette wheel." (Still River Retirement Planning Software, Inc.)

[Guidance Overview] Roth IRA Conversion Recharacterization
Excerpt: "IRS allows an individual to reverse the conversion from a traditional IRA to Roth IRA by a 'recharacterization.' One of the reasons an individual chooses a recharacterization is when an account value drops soon after the conversion to a Roth IRA. A drastic value drop leaves an individual responsible for taxes on the larger amount converted even though the current value has decreased significantly. Taxpayers have until the due date of their federal income-tax return (including extensions) for the year the Roth IRA conversion occurs to make a recharacterization." (McKay Hochman Co.)

Five Questions to Help You Decide Whether You Should Convert Your Traditional IRA to a Roth
Excerpt: "A certified public accountant or certified financial planner can help you with the decision by weighing factors such as your tax and income situations now and in the future, and even the makeup of your family. If you're not working with an adviser, consult one of the Roth IRA calculators available on the Internet, such as the ones from TIAA-CREF, the Vanguard Group or Fidelity Investments. Here are some questions that will help you or your adviser decide whether a conversion will leave you with more money in the long run." (AARP)

IRS Provides Guidance on HEART Act in IRS Notice 2010-15
Excerpt: "The Internal Revenue Service has provided guidance in the form of questions and answers with respect to certain provisions of the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008." (PLANSPONSOR.com)

[Guidance Overview] Rollover Chart Updated: Rules As of 2010
Portability chart as of 2010: Rollover to Recipient Plan. (McKay Hochman Co.)

[Guidance Overview] Plan Rollovers to a Roth IRA
Excerpt: "[Question]: In order to convert my plan account to a Roth IRA, do I have to make a direct rollover from the plan to the IRA? [Answer] No. A taxpayer may accomplish the conversion from a plan account to a Roth IRA either by a direct rollover from the plan to the IRA or by a 60-day rollover, in which the taxpayer receives the distribution and rolls over the distribution to a Roth IRA within 60 days of receipt." (SunGard Relius)

Seven Penalty-Free Ways to Tap Your IRA Before Retirement
Excerpt: "[T]here are a few ways to crack your nest egg early without paying the usual 10 percent early withdrawal tax. Large medical bills, education expenses, and a first home purchase are among the Uncle Sam-sanctioned ways to spend your retirement stash. Regular income tax, however, will still apply to your withdrawal." (U.S. News & World Report)

How to Fund a Roth IRA Conversion Through the 'Back Door'
Excerpt: "Here is where the 'back-door' method comes into play: As of Jan. 1, the federal government has lifted the $100,000 household income limit (again, modified adjusted gross income) on converting traditional IRA assets to a Roth. Having that limit removed makes it possible for people with higher incomes to move assets from traditional IRAs to Roth IRAs. First, you would fund a traditional IRA and then you could convert those assets to a Roth." (The Wall Street Journal)

Results of the Roth 457 Survey (PDF)
2 pages. (National Association of Government Defined Contribution Administrators, Inc.)

To Convert or Not to Convert? Roth IRA Conversions in 2010: Issues and Opportunities
Excerpt: "In 2010, a restriction limiting the ability of many taxpayers to convert funds held in traditional Individual Retirement Accounts (IRA) to Roth IRAs has been lifted. Financial advisors and CPAs can expect many questions from individuals as to the advisability and feasibility of making such a conversion." (The CPA Journal)

[Guidance Overview] Roth IRAs: 2010 Law Changes and Retirement Saving Opportunities
Excerpt: "[This article] discusses the 2010 law changes, and how the changes apply to a conversion of a traditional IRA to a Roth IRA." (SunGard Relius)

H&R Block to Refund IRA Fees to Settle Lawsuit
Excerpt: "H&R Block Inc will pay as much as $20.2 million to settle a New York lawsuit accusing it of fraudulently marketing individual retirement accounts (IRAs) that charged hidden fees." (planadviser)

New Rules Ease Roth Conversions, but Benefits Vary
Excerpt: "Roth's benefits extend beyond its possible tax advantages. Unlike traditional I.R.A.'s, you are not required to take required minimum distributions once you turn 70 ?, which makes the Roth an effective way to leave money to heirs -- or to save for emergency expenses later in life. And because withdrawals are not counted as income, what you take out won't affect whether your Social Security benefits are taxed. (Some people with high retirement income must pay taxes on a percentage of their benefits.)" (The New York Times; free registration required)

[Guidance Overview] Refresher on Roth: What You Need to Know
Excerpt: "When rolling over assets from a retirement plan into an IRA, a decision on what type of IRA is right needs to be made. Determining the taxability of the rollover may help with this decision. In order to determine the taxability of the rollover, it must be determined what type of money is being rolled into the IRA from the retirement plan, pre-tax or after-tax money. There is an option to roll retirement accounts into a traditional IRA with no tax affects or to a Roth IRA where taxes will apply." (TRI-AD)

[Guidance Overview] Roth IRA Conversions Post 2009
Excerpt: "In taxable years beginning after December 31, 2009, the AGI limitation that has prevented many taxpayers from converting traditional IRAs to Roth IRAs is eliminated. In addition, there is a one-time bonus in the law regarding income recognition. A taxpayer who makes a conversion in 2010 may elect to recognize all the income in 2010 or spread the income over the next two years. The wording of the law is a bit odd: '. . . shall be so included ratably over the two-taxable-year period beginning with the first taxable year beginning in 2011.'" (AccountingWEB)

[Opinion] ICI Letter to Wisconsin Legislature Co-Chairs, Joint Committee on Finance, on Roth IRA Conversions (P.L. 109-222 ? 512)
Excerpt: "The Investment Company Institute . . . strongly urges the Wisconsin legislature to adopt changes to Wisconsin's tax law to allow Wisconsin residents to convert traditional Individual Retirement Accounts (IRAs) to Roth IRAs beginning in 2010, consistent with recent changes in federal law." (Investment Company Institute)

[Guidance Overview] IRS Explaination of Requirements for Nonspousal Distributions
Excerpt: "This explanation should be provided to the nonspouse beneficiary no earlier than 180 days and no later than 30 days before making the distribution. Notice 2009-68 contains two sample notices that plans may give to nonspouse beneficiaries." (Wolters Kluwer)

Should You Convert to a Roth IRA?
Excerpt: "The government is offering a tax-deferred window for those switching from a conventional IRA. But the tax break is not necessarily a good deal." (Los Angeles Times)

[Guidance Overview] The Roth IRA in 2010: Should You Convert?
Excerpt: "Who Would Benefit from a Roth IRA Conversion? Ostensibly, the benefit of conversion is that the taxes are paid today at a known rate, instead of in the future at an unknown and possibly higher rate. But deciding whether to convert a traditional IRA to a Roth IRA depends largely on the ability to pay the taxes that are due when the conversion takes place. For 2010 conversions, individuals have two years to pay the income tax due." (National Center for Policy Analysis)

[Guidance Overview] Roth IRA Conversion Rule Changes
Excerpt: "Beginning January 1, 2010, conversions from a traditional IRA to a Roth IRA will become available to all individuals, regardless of their incomes." (McDermott Will & Emery)

Employee Benefits Developments, December 2009
Excerpt: "A brief look at developments in Employee Benefits law from November and December 2009, including cases, rulings, and opinions." (Hodgson Russ LLP)

[Guidance Overview] Waiving the 60-Day IRA Rollover Rule
Excerpt: "Under Revenue Procedure 2003-16, taxpayers seeking a waiver must apply for a private letter ruling unless, in an otherwise valid rollover, the lapse is due solely to an error by the depositing financial institution and the funds are deposited into an eligible plan within one year from the beginning of the 60-day period." (American Institute of Certified Public Accountants)

[Guidance Overview] New Roth IRA Conversion Rules in 2010: Should You Convert?
Excerpt: "The reason Congress repealed the $100,000 eligibility limit for conversion was to encourage higher income taxpayers to convert to a Roth IRA, and thereby pay taxes on their regular IRA now rather than in future years. To further encourage the conversion, Congress gave taxpayers two years to pay the taxes due (2011 and 2012)." (Warner Norcross & Judd LLP)

Real Savings Plus: An Automatic Investment Option for the Automatic IRA
Excerpt: "In this paper, the Initiative on Financial Security at the Aspen Institute proposes an investment option for the Automatic IRA: Real Savings (RS+ ). RS+ combines two widely traded and highly liquid assets ? Treasury Inflation Protected Securities (TIPS) and a broad-based equity market index ? to provide savers with a personalized, automatic target date investment option." (The Aspen Institute Initiative on Financial Security via Social Science Research Network)

New Technology Helps Answer the Roth IRA Conversion Question
Excerpt: "Technology providers and product companies have been rolling out Roth IRA conversion calculators in a bid to meet the expected needs of advisers and their clients ahead of some significant changes in conversion rules for next year. . . . So a Roth conversion calculator -- whether found on the web or nestled in a more sophisticated financial planning software package -- isn't a bad jumping-off point when trying to assess whether it makes sense for a client to direct retirement assets to a Roth IRA." (Investment News; free registration required)

Automatic IRA Legislation Likely to Pass in 2010
Excerpt: "Retirement finance experts believe that Congress will reintroduce and pass in 2010 two bills -- S. 1141 and H.R. 2167 -- that would require small- and medium-sized businesses to automatically enroll their employees into an IRA. The Senate bill, sponsored by Senator Jeff Bingaman (D-New Mexico), and the House bill, sponsored by Rep. Rich Neal (D-Massachusetts), are both called the Automatic IRA Act of 2007." (Investment Advisor)

[Guidance Overview] New Lump Sum Distribution Notices Required for 2010 (PDF)
1 page. Excerpt: "Linked [at the end of the article] are Word versions of the two new safe harbor notices contained in IRS Notice 2009-68 that you can download and modify for your use: Safe Harbor Notice ? Roth Account; Safe Harbor Notice ? Non-Roth Account." (Locke Lord Bissell & Liddell LLP)

[Guidance Overview] New Tax Rules in 2010 Will Give More People Access to a Roth Individual Retirement Account
Excerpt: "[S]tarting Jan. 1, Uncle Sam will permanently eliminate both the income and filing-status restrictions on transferring money from a traditional IRA to a Roth -- a procedure known as converting. So, anyone willing to pay the income taxes due upon making such a move will be able to funnel retirement savings into a Roth, where it can grow tax-free." (The Wall Street Journal)

[Guidance Overview] DOL Opines that Security Interest in Non-IRA Brokerage Assets to Cover IRA Indebtedness is a Prohibited Transaction (PDF)
Excerpt: "In Advisory Opinion 2009-03A (October 27, 2009), the U.S. Department of Labor (DOL) opined that the pledge of an IRA owner's personal accounts at a brokerage firm to secure the payment of any debt or liability in his self-directed IRA maintained with that firm would violate the prohibited transaction rules of Internal Revenue Code ? 4975." (Sutherland)

[Opinion] Taking the Roth 401(k) to the Next Level
Excerpt: "To bring employer plan and IRA opportunities into conformity and to prevent a migration of plan assets into IRAs, PSCA is recommending changes to the Roth 401(k) and 403(b) rules (i.e. Code Section 402A) that would: 1. Permit plan sponsors to allow plan participants to convert traditional retirement savings (i.e., employee elective deferrals and after-tax contributions, and employer contributions) into Roth savings within their 401(k) or 403(b) plan and to roll monies from all eligible retirement plans, including Roth IRAs, into the designated Roth account of a 401(k) or 403(b) plan. 2. Exempt Roth 401(k) and 403(b) money from the minimum distribution rules in the same manner that Roth IRAs are not subject to those rules." (Profit Sharing / 401k Council of America)

[Official Guidance] Text of IRS Notice 2009-94: 2010 Limitations on Benefits and Contributions Under Qualified Retirement Plans (PDF)
Excerpt: "The limitation for defined contribution plans under ? 415(c)(1)(A) remains unchanged for 2010 at $49,000. . . . The limitation under ? 402(g)(1) on the exclusion for elective deferrals described in ? 402(g)(3) remains unchanged at $16,500. . . . The dollar limitation under ? 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in ? 401(k)(11) or 408(p) for individuals aged 50 or over remains unchanged at $5,500." (Internal Revenue Service)

The Evolving Role of IRAs in U.S. Retirement Planning (PDF)
32 pages. Excerpt: "Both direct contributions and rollovers from employer-sponsored retirement plans have led to widespread ownership of IRAs. Unlike many other categories of wealth ownership -- such as direct equity holdings -- total IRA assets were not highly concentrated among the very wealthiest of families, and a significant fraction (40.5 percent) of U.S. households owned some form of IRA. IRA ownership and account balances were widespread across many different socioeconomic dimensions, including age, income, and educational attainment." (Investment Company Institute)

[Official Guidance] Text of IRS Notice 2009-93 Allowing Various Information Statements to Use a Truncated Social Secuity Number (PDF)
5 pages. Identity theft is becoming such a large problem that the IRS is allowing the use of truncated (partial) Social Security Numbers on the copies of various statements that go to retirement plan and IRA participants for 2009 and 2010. Paper payee statements for forms in the 1098, 1099 and 5498 series for 2009 and 2010 are eligible for the program. (Internal Revenue Service)

Considering a Conversion? Roth, That Is
Excerpt: "The issues aren't quite the same as those one faces when considering the deepest aspects of personal faith and religious doctrine, but a 'Roth conversion' can pose some difficult issues for investors nonetheless. And we're going to hear much more about this going forward because of a scheduled change in the law: Unless something unexpected happens in D.C., come 2010 there will no longer be income limits on Roth IRA conversions. There will be a lot written on the issue of whether one should convert or not, as well as endless articles describing all kinds of 'strategies' to potentially leverage the change (some legitimate and others more questionable). For me, three things are important in considering this kind of 'conversion' . . . ." (The Vanguard Group, Inc.)

Roth IRA Conversions: The Basics of the 2010 Rule
Excerpt: "Still your tax bill can be hard to predict. To have some control over how much you pay the government each year, you should have both taxable and non-taxable accounts from which to draw your retirement income. Imagine it this way. Perhaps early in retirement you choose to continue to work part time and supplement your income from retirement savings accounts. The combined income may put you into a higher tax bracket. However, if you take some money from a Roth IRA that year, because withdrawals are nontaxable, it could help keep you in the lower bracket." (Investment News; free registration required)

[Official Guidance] DOL Advisory Opinion 2009-03A on Certain Transactions or Arrangements Involving an Individual Retirement Account
Excerpt: "[The DOL was asked w]hether an IRA owner's granting to a broker of a security interest in assets held in his non-IRA accounts to cover potential indebtedness of an IRA established with the broker would result in prohibited transactions under Code section 4975." (U.S. Employee Benefits Security Administration)

Roth IRA Conversion Mania: My IRA for a Calculator That Works
Excerpt: "No matter who converts, what is certain now is that financial-services firms are rolling out -- at a breakneck pace -- new tools and resources designed to help IRA owners figure out whether a conversion makes sense or not." (MarketWatch)

[Opinion] The 401(k): Don't Believe the Hype
Excerpt: "If someone made me America's personal-finance dictator, I'd scrap the 401(k). These workplace retirement plans are inequitable, as some companies offer good ones, some bad ones and others none at all. Fees are often too high. And even the better plans often don't provide enough investment options. Instead, I'd like to see the Roth IRA opened up to allow 401(k)-sized contributions - $16,500 a year instead of $5,000. (Or $22,000 and $6,000 for people 50 and over.) And I'd like to see the Roth's income limits lifted, so anyone could have one. . . . But since I'm not running things, the best I can do is suggest ways to make the traditional 401(k) work best." (Community Television Foundation of South Florida Inc.)

[Opinion] American Benefits Council Letter to IRS Regarding Partial Rollovers under Notice 2009-68 (PDF)
4 pages. Excerpt: "The Council is writing to urge the Internal Revenue Service to clarify the treatment of a partial rollover to an IRA of a distribution from a tax-preferred employer plan that includes after-tax contributions. Notice 2009-68, which was published on September 4,2009, updates the safe harbor '402(f) notice,' which describes the tax rules applicable to eligible rollover distributions from employer plans. The updated 402(f) notice includes a description of the tax rules applicable to plan distributions that include after-tax contributions. The description suggests for the first time a distinction in the tax treatment of partial rollovers that turns on whether the rollover is accomplished as a 60-day rollover or a direct rollover. The Council believes that there is no such distinction and urges the Service to clarify the matter." (American Benefits Council)

New Roth Conversion Opportunities: Is Converting a Traditional IRA, 403(b) or 401(k) a Smart Move, Unwise or Much Ado About Nothing?
Excerpt: "While the decision to convert to a Roth account can provide tax savings for some, it is not a wise move for all. Typically the most important consideration is a comparison between the marginal income tax rate in the conversion year and the marginal income tax rate in the withdrawal year if not converted, where this latter tax rate is usually a tax rate from a retirement year. If the future income tax rate is anticipated to be higher, converting to a Roth may be appealing, but if the future income tax rate is expected to be lower, converting may be unwise. When the anticipated tax rates are similar, other factors should be considered, such as required minimum distributions, tax diversification, beneficiary taxation, taxation of Social Security benefits, Medicare Part B premium amounts, and itemized deductions." (TIAA-CREF Institute)

Advisers Find Roth IRA Conversion Opportunity a Tough Sell
Excerpt: "[M]any advisers are having a hard time persuading clients to make the conversion and pay taxes now instead of later, given that most of them have taken such a huge hit from the market downturn, advisers said. Starting Jan. 1, people making more than $100,000 annually will be eligible to convert their traditional individual retirement accounts or 401(k) plans with previous employers into Roth IRAs. Currently, only those who make less than that amount a year are eligible to convert. Logically, it would make sense for many of these clients to convert next year, since their portfolios and their taxable income are probably smaller now than they will be years from now . . . ." (Investment News; free registration required)

[Guidance Overview] New Roth IRA Conversion Rules for 2010
Excerpt: "Starting in 2010, all taxpayers will be eligible to convert a regular IRA to a Roth IRA, regardless of their level of adjusted gross income ('AGI'). The option opens new opportunities, but also may require important tax planning. This article will discuss the new rules for conversion of a traditional IRA to a Roth IRA and the issues a taxpayer should consider before converting." (Warner Norcross & Judd LLP)

The links shown above have been gathered from the web by the editors at BenefitsLink.com. Each article's publisher is shown above in parentheses. Opinions expressed in each article are those of the article's publisher, not necessarily those of BenefitsLink.com, Inc. or any web site that displays these headlines in a "frame." You should contact the listed publisher for copyright information about any particular article or to inquire into the right to use the article in any manner.