Articles I’ve read to date on this subject touch on many but not all issues one should consider in answering the question: “to convert or not to convert?” After running the numbers in every conceivable manner, the answers may be simpler than you might think…

For high net worth individuals and savers who won’t outlive their retirement nest eggs, it’s all about time since Roth IRAs are not subject to required minimum distributions (for either you or your spouse beneficiary).  For less affluent individuals or reluctant savers, it’s the “psychological” push; and for all of us, our marginal tax rate (MTR) when we contribute versus our MTR when we receive distributions matters, but perhaps not to the extent you might think.

Only time (and future tax law) will tell if these conclusions are sound.  If you want to keep it simple, these “rules of thumb” should serve you well, if you want to learn more about how and why I came to these conclusions, read my article: “Roth IRA Conversions: What you need to know but may not have known to ask…” and access the background information provided in the Roth IRA Conversion Knowledgebase; and…

If you think an explanation is deficient, a rule is misstated, or the conclusions are flawed, please submit your comments and questions below, or on the applicable page of the article or knowledgebase.

-Barry R. Milberg
bmilberg@erisaexpertise.com

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