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  1. Sandra Flint says:

    After briefly reading several of your articles on converting Traditional IRA funds to a Roth IRA, it seems that I may be a perfect candidate as I anticipate being in a higher tax bracket when the RMDs start rolling in. Before I jump into obsessively investigating this further, I want to start with this question: I have a Traditional IRA as a result of being awarded 50% of my husband’s employer-provided 401K in our divorce. Is there anything different about making Traditional to Roth conversions that I should be aware of (i.e. I’m not allowed to do it because it’s NOT my own 401K)? Below are a few facts in case they might potentially influence your answer:
    1) I am 64, still working full time and plan to retire in 2 years at my FRA. 2) I am currently in the 15% tax bracket. 3) I rolled the 401K funds into a Vanguard IRA account (current balance approx. $310,000) where I also own a Roth IRA (current balance approx. $26,000). 4) I have my own employer-provided retirement plan (Public Employee Retirement Fund). 5) I don’t anticipate pulling any monthly funds from my Traditional IRA when I retire as my PERF and Social Security will be sufficient enough to maintain my current lifestyle (barring any emergencies).

    So, are there restrictions or a different set of rules for me with regard to converting?

    1. jblankenship says:

      Sandra – when you rolled over the QDRO’d 401k money into an IRA in your name, it became your IRA. You are allowed to do whatever you wish (within the law) with that IRA as if you had contributed the money in the traditional fashion, including Roth conversion.

      Hope this helps –


  2. clydewolf says:

    You wright, “For a Roth IRA, of course there’s no tax on the withdrawal.”

    Most of the time that will be true. But when the ROTH IRA owner is 59 1/2 and you have not owned a ROTH IRA for at least 5 years, While there is no penalty for distributions, Earnings distributed from your ROTH IRA will be taxable as ordinary income.

    I often suggest folks get a ROTH IRA early in life to eliminate that 5 year ownership requirement later in life.

    1. jblankenship says:

      Agreed, Clydewolf. Nice catch!

  3. Jim A says:

    Jim, what about rolling a chunk of the pre-tax IRA or 401-k money to a Roth IRA? Looking from a distance (I’m not there yet!) that if one retires before age 70 and has much lower income, then there is a window of opportunity to pay the tax at a lower rate, while continuing tax-preferential treatment in a Roth, and not have the RMD later, either. Do I have that right or is it not quite so clear as that?

    1. jblankenship says:

      Hi Jim –
      Yes, that’s a great option to use during the years between 60 & 70, since you can set the amount that you withdraw and control the tax hit. This will help to reduce your RMDs later.


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