Traditional IRA vs. Roth
Hi, I have an old 401k with a former employer and want to roll it into my IRA. But, I have both a Traditional and a Roth IRA. What considerations/ramifications to either should I entertain before electing which IRA to receive the rollover? Thanks!
Permalink Submitted by Alan - IRA critic on Wed, 2017-07-19 15:42
When converting to a Roth IRA, the marginal rate paid for the conversion should be less than, or in some cases no more than your estimated rate in retirement. You could also roll it into your TIRA account and then convert from the TIRA the amounts you want to. You may not wish to have the entire plan balance rolled into a Roth IRA as that could increase your marginal tax rate. If your expected tax rate is expected to be lower next year, you could also wait until January to convert.