Roth IRA Conversion:When Is It a Good Idea?

Roth IRA Conversion:When Is It a Good Idea?
Robert H. Louis, Author
The Legal Intelligencer

Robert H. Louis, co-chair of the Personal Wealth, Estates and Trusts Practice Group, wrote this article about converting retirement plan accounts and individual retirement accounts, or IRAs, to Roth IRAs.

In the article, Mr. Louis suggests there are two reasons to consider converting this year. First, investment values are still well below their peaks, and it is better to convert and pay tax now, when there is a smaller amount on which to pay tax. Second, the maximum federal income tax rate this year is 35 percent. Under current law, the maximum rate will rise to 39.6 percent next year.

Mr. Louis concludes that people with large IRA or retirement account balances and substantial other assets should consider the advantages of conversion to a Roth IRA this year, saying it is a valuable and effective tax-planning technique.