Roth IRA

Return to home page

Financial Security by Design

Information on the Roth IRA

The IRS announced (99-57, May 26, 1999) that taxpayers who have already filed their 1998 Federal income tax returns can still elect to recharacterize a 1998 Roth IRA conversion provided that they act on or before October 15, 1999 and that they file an amended return reflecting the recharacterization. The amended return does not have to be filed by October and the phrase "FILED PURSUANT TO SECTION 301.9100-2" should be written on the top of the return.

I have spoken with Patrick Kusiak, the attorney who wrote FTB Legal Ruling 98-4 allowing Roth recharacterizations before California fully conformed to the federal law. He said that he has always viewed the deadline for recharacterizing a Roth conversion to be October 15th and that this deadline is not dependant or whether or not a return has already been filed.

Roth Might Mean Rethinking Your Estate Plan

The most important conversion benefit for families of ordinary means is often the ability to create wealth for the children after the parents are gone. Also, important advice on beneficiary designations.

Should You Convert to a Roth IRA? It Depends on Your Circumstances.
Discussion, with examples. Note two corrections.
1. On p.20, the text should read There are the usual restriction on withdrawing money before retirement. In addition, money withdrawn from a Roth account within five years is subject to tax.
2. And on p. 22, In these simulations, annual distributions are the larger of an emergency distribution to balance income and expenses - which is frequently zero - or the minimum distribution over the joint lives of husband and wife refigured annually.

A Practitioner's Guide to Roth Conversions

The details you need to know when evaluating a conversion.

Evaluate a Roth Conversion Like Any Other Investment Opportunity

Comparison to variable universal life insurance and buy & hold stock portfolios.

Test Your Roth IQ!

Nuances of the Roth conversion in a question and answer format, courtesy of the clients and friends who have asked these questions.

State Income Taxation

California has adopted the 1997 legislation. This site lists what I have learned about the status in other states.

The Best Age for Converting to a Roth IRA

Most younger investors should not convert until retirement unless they are convinced that the conversion opportunity will be repealed.

Roth Conversions: What to Consider Between Now and the End of the Year

This article reviews the reasons that a Roth conversion can be attractive for certain individuals and a strategy is discussed to reduce the risk from uncertainties. Having determined the conversion amount, the discussion turns to when and how to pay the tax on the conversion income and to estate planning considerations. The discussion concludes with the rules for reversing a conversion and the penalties if converted funds are withdrawn within five years.

Should I Roll My 401k Over to a New Employer?

Probably not. Also discusses conduit and education IRAs.

Northwestern Mutual has produced a longevity calculator. Quality unknown but fun to use.

Proposed changes to IRS regulations which allow a by-pass trust to be a "designated beneficiary" for a traditional or Roth IRA.

Mention of a web site is not an endorsement. References are solely to assist your research.