TSA transfer to Roth IRA

[Guest davidm]

Currently my wife has a TSA (tax shelter annuity). We are interested in getting an Roth IRA. Can I transfer the money in her TSA to the Roth IRA without being taxed. Is there anything else we need to know about the possible transfer? Thanks

Also, Can I invest in mutual fund with a Roth IRA?

[Guest Matt Tuttle]

You should be able to transfer the TSA to a regular IRA after that if you meet the eligibility requirements you can transfer it to a ROTH and pay taxes on it. Whether you should do this or not depends on many factors---can you pay the tax from some other place, how much it is, what tax bracket you expect to be in in retirement, etc.

Matt Tuttle

203-609-9077

http://www.wealthadvisors.bigstep.com

[Guest davidm]

Thanks for the reply Matt. What I don't understand is why I have to pay taxes to transfer from a tax shelter annuity to a regular IRA. I thought this would be tax free.

David

[Michael Devault]

You can roll the 403(B) into a traditional IRA without paying current income tax on the rollover. However, if you subsequently convert that rollover (traditional) IRA to a Roth IRA, the amount converted is taxable. And, as Matt pointed out, you have to meet certain criteria in order to be able to convert to a Roth.

Hope this helps.