To take advantage of the opportunity to pay your taxes owed in two parts, you must request a direct rollover if your funds are being rolled over from a traditional IRA to a Roth IRA. A direct rollover is a transaction wherein your funds will be rollover directly between your current IRA and your target (or new) Roth IRA. You will never receive physical possession of the funds; if a check is issued, it will be paid directly to the trustee or manager of the Roth IRA account. (more…)
Posts Tagged ‘Rollover IRA’
Rollover IRA – Roth IRA Conversion: Does it Make Sense for You?
Posted by admin on March 16th, 2010
The benefits of Roth IRA accounts are well established. With Roth IRAs, you can make tax-free withdrawals in qualified situations (provided you meet certain holding criteria) and you don’t need to make required withdrawals by a certain age, as with traditional IRA accounts. If you anticipate being in a higher tax bracket when you get older, a Roth IRA account can help save you money as the taxes on Roth IRA contributions are paid up front.
So why wouldn’t you convert all of your traditional IRA holdings to Roth IRA accounts right away? Well, there are a few catches, perhaps the most noticeable of which is that you’ll have to pay ordinary income taxes on any funds you convert to your Roth IRA rollover account. Let’s look at a few situations in more detail to see where a rollover IRA to Roth IRA conversion makes sense for you: (more…)
