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Roth-icize Now?!

It may be the ripest of times to convert a traditional IRA to a Roth one. Depressed values now mean low conversion tax. Considerable upside potential will then be untaxable. But is there an exposure due to your conversion taking place in wildly volatile times?

I did this before within one brokerage, and think I threw a bunch of paperwork over the wall way ahead of time. Is there a brokerage that would let you set it up, but leave you to pull the trigger or not just a day or so ahead? Is it an end of the year thing only? Hard to commit ahead for these things when future 30% market swings might have such an effect on the tax or advisability of conversion.

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Reply to
dumbstruck
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Your only risk is not picking the bottom of the market. Make sure that your income is low enough to convert.

If you don't have a Roth account now, set one up with your broker. The transfer can be done in a day and the tax effect will be calculated for the prices in effect on that day.

Mutual funds might go on a buying spree in the last half of December to take advantage of low prices, so do your transfer before then.

-- Ron

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Reply to
Ron Peterson

I did a partial Roth conversion at T Rowe Price and it took close to 3 weeks to process. It processed on MONDAY this week, getting done a day before the 2nd largest increase in history. I am anxious to see other responses.

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Reply to
jIM

Yippie. On top of that, is this that special year where IRS allows spreading the Roth conversion tax across 2 years (without actually splitting the transfer)?

Reply to
dumbstruck

Oops, I guess that benefit is set for year 2010 only.

Reply to
dumbstruck

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