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Message
Roth IRA educate me
Posted on 1/17/15 at 3:34 pm
Posted on 1/17/15 at 3:34 pm
Currently 33 with IRA (rolled 401k in once I left previous job) no health issues it being asked to roll 60k i to a Roth. What are advantages/disadvantages, of this?
Currently i donor pay attention to current IRA as it is not aggressive and one I am being told to switch into is aggressive, so opinions from financial professionals.
Currently i donor pay attention to current IRA as it is not aggressive and one I am being told to switch into is aggressive, so opinions from financial professionals.
2
Posted on 1/17/15 at 3:49 pm to tduecen
Are you "typing on your phone"?
Posted on 1/17/15 at 3:54 pm to bayoubengals88
quote:
Are you "typing on your phone"?
Too many fbd check ins on untappd I think.
Posted on 1/17/15 at 4:09 pm to tduecen
You'll have to pay taxes on that rollover amount.
I'd personally leave it in the IRA, and start my Roth today (can contribute for 2014 up until April 15th). I'm a big fan of tax diversification, and without knowing your current tax rate vs projected future, going 100% into either if ill-advised.
Advantage of Roth is you pay taxes today, at your today's rate, and can withdraw the full amount tax free (contribution + earnings) without being taxed (rules are age 59.5 and at least 5 year account age).
You can also withdraw contributions tax free at anytime. So it can serve as a limited replacement emergency fund (since can only contribute a limited amount per year, can't fully replenish what is withdrawn).
ETA: Check reference thread at top of board for details in other threads.
I'd personally leave it in the IRA, and start my Roth today (can contribute for 2014 up until April 15th). I'm a big fan of tax diversification, and without knowing your current tax rate vs projected future, going 100% into either if ill-advised.
Advantage of Roth is you pay taxes today, at your today's rate, and can withdraw the full amount tax free (contribution + earnings) without being taxed (rules are age 59.5 and at least 5 year account age).
You can also withdraw contributions tax free at anytime. So it can serve as a limited replacement emergency fund (since can only contribute a limited amount per year, can't fully replenish what is withdrawn).
ETA: Check reference thread at top of board for details in other threads.
This post was edited on 1/17/15 at 4:10 pm
Posted on 1/17/15 at 4:10 pm to bayoubengals88
Doesn't everyone now?
Posted on 1/17/15 at 4:11 pm to LSUtigerME
So if I have 30k in an IRA currently I should not switch it to a Roth? What if I opened a Roth with 15k and started to contribute to
It and left the IRA alone?
It and left the IRA alone?
Posted on 1/17/15 at 4:48 pm to tduecen
You could, but you'd owe taxes on the rollover amount. I'm not exactly sure how the rollover taxation process works, but you'd certainly have to pay some amount toward the taxes.
You can only contribute up to $5500 to a Roth per year. You could open one for you and the wife. So you could open one with $11000 this year and not contribute until Jan next year (could do the same for wife too).
You can only contribute up to $5500 to a Roth per year. You could open one for you and the wife. So you could open one with $11000 this year and not contribute until Jan next year (could do the same for wife too).
Posted on 1/19/15 at 1:22 pm to tduecen
You would have ordinary income tax on the 15k "conversion" in the calendar year you convert in. I think doing the $5,500 for your current year (through 4/15 for 2014) Roth would be more important because it's a use it or lose it proposition and you can always convert until they change the rules. I didn't read where you said you had a wife, but if you do, contribute for her as well before converting.
As for good idea or not... if you are in low income earning years and you anticipate earning more later, try to do more while it's cheaper. On the long time horizon though, I certainly think the Roth is the better option as we have no reason to believe we are going to spend less money as a country and eventually we'll have to pay that debt - through higher taxes.
As for good idea or not... if you are in low income earning years and you anticipate earning more later, try to do more while it's cheaper. On the long time horizon though, I certainly think the Roth is the better option as we have no reason to believe we are going to spend less money as a country and eventually we'll have to pay that debt - through higher taxes.
Posted on 1/19/15 at 4:46 pm to LSUtigerME
quote:
You can only contribute up to $5500 to a Roth per year. You could open one for you and the wife. So you could open one with $11000 this year and not contribute until Jan next year (could do the same for wife too).
Couldn't he at this date open one up for both he and his wife, then fund both of them for 2014 and 2015? That would make a maximum of 22k he could fund into them at this time if so.
Posted on 1/19/15 at 5:24 pm to Al Dante
quote:
roll 60k i to a Roth
You do this than you will be cellecting food stamps in a no time.
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