government 457 deferred comp
My retirement account is a government 457 deferred comp. plan. With the 457, funds are available for disbursement when the person retires at the age of 50. I am retired.
I am planning on rolling these funds into a Roth IRA. Is the Roth IRA the best choice if my goal is to not have to pay taxes on the earnings in the future and leave a something for my family?
Permalink Submitted by Alan - IRA critic on Thu, 2015-07-30 18:16
Not necessarily. A Roth conversion is beneficial if you expect your marginal tax rate in retirement to be higher or in some cases about equal to the tax rate you will owe on the conversion. If you will not have much saved for retirement and your tax rates will be lower than what you will pay for the conversion, the conversion is detrimental. You can lower the tax rate for the conversion by just converting small amounts each year to keep your tax rate low, and early retirement is a good time to do that, before you start collecting SS benefits. If you want to convert a small amount but the 457 requires you to take large distributions or a lump sum, then roll it all to a TIRA and then convert from the TIRA to a Roth using small amounts. These are general guidelines, of course I do not know your particular situation.