Asked by Katie  |  Submitted April 22, 2014

IRA or Roth IRA?

I am changing banks and will be closing my traditional IRA and rolling it over to a new bank.

Should I roll it over into another traditional IRA or a Roth IRA? Do the benefits outweigh the tax implications?

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  Answers  |  2

April 22, 2014

Katie,

Conversion from a traditional IRA to a Roth IRA is beneficial when the amount you are converting allows you to stay in the same tax bracket and you have time for the funds to compound. More information is needed to accurately assess whether you should convert all, part or none of your IRA to a Roth. Current taxable income, the amount in the IRA, the expected income and tax bracket when you are going to pull the funds out, the rate of return on the funds until then and how would you expect to withdraw the funds (lump sum or annual income) are facts to be considered.

$commenter.renderDisplayableName() | 01.22.17 @ 18:52

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March 03, 2015

Depends, Do you want tax deduction now or do you want tax free money later.
if you have a 401k at work, IRA is out of the running ( IRS doesn't let you take a deduction)
If you would like to pay small tax now and invest and let it grow in to a beautiful nest egg and pull out tax free then consider ROTH.

$commenter.renderDisplayableName() | 01.22.17 @ 18:52

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