Convert IRA to Roth with the down market
Terry
I read your response to your reader about converting a traditional IRA to Roth to avoid tax consequences. I was thinking of doing the conversion now since the value has dropped with market thinking that the taxes would be lower and letting it stay in the fund until the market recovers. I am 67 years old single still working full time ($70000 annually) and collecting a defined pension ($24000). I intend to retire in 2024 and will be drawing a second defined pension from my current employer. I have a 457 valued about $400000 and $400000 in T bills. I anticipate my annual income between 2 pensions and social security to be $60000. Would be it wise to convert and pay taxes now or wait.
I always enjoy your WGN appearances, website and value your guidance.
Terry Says
Sounds like you’re in pretty good shape. If you’re still working, you probably can’t convert your 457! You have to wait until you retire and roll it over to an IRA. (You didn’t mention already having an IRA on your list of assets.) If you DO have an IRA and do want to convert it — paying taxes with your liquid money in T-bills — this would be the time to convert at least part of it. Of course, that’s assuming we are at the “bottom” of the market!
