Okay, I Just Saw A Person On MSNBC Talking About A New ROTH IRA Option!

[ChiciB1]

He was talking too fast for me to actually understand ALL that he was saying, but I did hear something about taking your money OUT of a present IRA, NOT ROTH, roll it over, pay the taxes, but you will have til 2011 to pay those taxes!

Does anyone have any information on this! I would LOVE to take my money out of Morgan Stanley, and if I can pay taxes over a two year span I would most likely do it!

I'm going to Google, but so many here always have so much information, or at least a place I can go to check it out!

Thanks!

[SCantiGOP]

1. happens in 2010

if you converted a traditional IRA to a Roth IRA you would owe taxes on the full amount when you file your 2009 taxes. if you do it in 2010, you can pay half the tax on the IRA in 2010 and the other half in 2011.

[ChiciB1]

2. Thanks... I've Heard Roth's Are Better Than What I Have... I Will Look

into it. Since it's almost 2010, I WILL have to wait! I'm just worried about Morgan Stanley and the BIG BOYS, just don't know that much about finances and the little I DO have I don't want to lose!

I realize they are doing fine right now, but you just never know!

[SCantiGOP]

5. my understanding is

that you can put the money in any kind of investment, from an aggressive stock fund to a FDIC backed CD (which doesn't earn enough to cover inflation but at least it's safe).

[FBaggins]

6. Don't assume that the Roth is better

Find out. Google "Roth conversion calculator" and plug in tour own assumptions. It really varies from person to person, but a shorthand summary is that it makes sense if you expect youtax bracket in retirement to be substantially higher than it is now. If you expect it to decline I retirement, then you're better off with the traditional IRA.

What makes this year attractive is that most people have lost a pretty penny in their investments... So you presumably pay taxes on a smaller amount. Of course a year or so ago would have been even better for most.

The other changes are that there used to be an income cap of ~$100,000 for conversion, so some people with large balances and high incomes didn't qualify. The other is that the tax can now be spread overtwo years instead of all at once. Be careful before jumping, however, because that doesn't change who this makes for... Just who can afford to do it. It's an incentive to encourage people to convert... Giving the government the tax dollars it wants NOW instead of years down the road. You know THEY benefit, make sure YOU do.

Best of luck!

[FBaggins]

7. Correction

If you convert this year he tax can now be split over a two year period.

[msongs]

3. make yourself a corporation and ask for a billion $ bailout no strings attached nt

[ChiciB1]

4. You Forgot To Say... Good Luck With That! LOL!

I don't have much money in my IRA, but I do have one!