Good Time for Roth Rollover

With the value of most retirement accounts dropping, it might be a good time to consider rolling over into a Roth IRA.  Most retirement accounts let you take a deduction now, but you pay tax when you get the money out.  With a Roth, you pay the tax now, but you don’t have to pay taxes on the gains if you take it out after retirement age.

If you have a retirement account that was worth $10,000 and now it is only worth $5,000 you may be able to roll that over into a Roth and pay taxes on the $5,000 amount.  When the market comes back up, your money will grow tax free and you will pay only half of what you would have if you rolled it over a year ago when it was worth $10,000.

Not all accounts can be rolled over into a Roth, but most IRAs can.  Also if you have a 403b or 401k from a previous job where you no longer work, you may be able to roll it over into a Roth IRA.  The 401k or 403b from your current employer can’t be rolled over into a Roth under most circumstances.

Related posts:

1. Taking Advantage of IRAs
2. Tax Free Retirement