Edit: Seems like there's confusion about the question. For those who haven't heard the term a Roth IRA conversion is taking money already in a Traditional IRA/ 401k, paying income tax on that money, and moving it to a Roth account, where it can continue to grow tax-free. And... there's essentially no limit on how much you can convert, so long as you can afford to pay the taxes. (E.g if I had 100k in a 401k, I could take it all, move it to a Roth, and the only "penalty" is paying ~22k in taxes THAT YEAR. And now the money is post-tax and grows as such.)
Anyone here know lots about retirement accounts and taxes?
I'm relatively young (first gun was a Spyder Compact 2000), so I have some time ahead of me. I also have a healthy 401k, 75% of it traditional and the balance Roth. Like most people, I've lost around 15% this year.
Anyone have good rules of thumb on converting it to a Roth? I know it involves paying taxes out of pocket, but our marginal is under 25% (lots of deductions). So is it just how much tax I can afford, or is there a better metric to deciding whether to move it?
Anyone here know lots about retirement accounts and taxes?
I'm relatively young (first gun was a Spyder Compact 2000), so I have some time ahead of me. I also have a healthy 401k, 75% of it traditional and the balance Roth. Like most people, I've lost around 15% this year.
Anyone have good rules of thumb on converting it to a Roth? I know it involves paying taxes out of pocket, but our marginal is under 25% (lots of deductions). So is it just how much tax I can afford, or is there a better metric to deciding whether to move it?
Comment