Why would I want to convert my existing 401K to a Roth IRA? Also today at a company meeting with a financial adviser, he mentioned that new rules go in to effect in 2010 with respect to this conversion so should I wait until then?
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If you have the cash to pay the tax bill on the conversion now, and you want to avoid taxes at retirement (because you would be in a higher tax bracket then), those are reasons to do the conversion. You have to pay tax on money you take out of a 401K, but a Roth IRA lets you take money out tax free. If you convert your 401K to a Roth IRA, you have to pay tax on the amount you convert now. |
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