IRA conversion question

[Guest JDThelen]

Here is the situation:

I have both a traditional and a Roth IRA. I have just recently rolled a 401k plan into my traditional IRA. I am over 59 1/2 so I understand I could start taking withdrawals and I am retired/semiretired at this time.

I would like to make contributions to my Roth IRA using money taken as withdrawals from my traditional IRA. I would do this at the 5K annual max contribution limit to the Roth. I may or may not have earned income during this period.

The traditional IRA is currently 15 times larger than the Roth due to the influx of funds from the 401k. I would like to eventually have the funds more equally distributed or even all in the Roth.

OK experts, what is the verdict? Can I or can't I proceed with my plan?

Thanks

JD Thelen

[John G]

You can only make contributions to your Roth if you (or your spouse) have earned income. If you have none, then you can not make contributions to your Roth.

You may be able to convert your IRA to a Roth, but you would have to meet income and tax filing rules. Conversion can be desireable, a "wash" or negative.... it depends upon your specific circumstances and what future scenario you use.