Roth Conversion
I converted some Traditional IRA money to an existing Roth account a few years ago and subsequently had to recharacterize it. It was a nightmare because it was comingled with other Roth money. Would like to convert about $100,000 now to a Roth. Can I open up a new Roth just for this conversion so if I have to subsequently recharacterize due to a poor market or whatever it will be much easier? And if I don’t have to recharacterize the account within the allowed time frame can I roll it over to the previously opened Roth at a future date to only have one Roth account to make it easier to manage? Thanks.
Permalink Submitted by mk foss on Sun, 2014-01-12 23:24
What you are describing is not only possible, it is recommended. For ease of future possible recharacterizations it is often recommended that you convert each asset class to a new separate Roth. Hopefully not all of the new Roths will go down in value by the October 15 recharacterization deadline. The accounts can be combined after October 15. If you’re doing a 2014 conversion, October 15, 2015 would be the final date for a recharactrization.