IRA TO ROTH CONVERION
HI IM IN MY 40’S AND HAVE A FIDELITY IRA THAT I WAS THINKING ABOUT ROLLING IT ALL OVER TO A ROTH. I HAVE NO MONEY TO PAY THE TAX SO I WOULD BE USING THE IRA MONEY FOR TAX AND THEN PAY 10 PERCENT PENALTY ON WHAT MONEY I USE FOR THE TAX. MY ACCOUNT IS 34K AND I WOULD HAVE THEM HOLD 8300 FOR TAXS. AND TO COVER THE 10% FEE. IS THIS A GOOD IDEA IF ITS THE ONLY WAY I CAN DO IT. THANKS .
Terry Says
NOT a good idea. You don’t have to pay a penalty for the conversion, as long as you don’t take any money out for 5 years. But it’s not worth digging into the account to pay the taxes. Just let it grow as is. And this year, and in the future, make a contribution to a Roth.
