f******e
发帖数: 87 | 1 Assume you are contributing to 401K only $6500 per year because you'd like
to have more fluid savings. And you have $20000 in IRA.
You should convert $20000 into Roth IRA in 2010, and increase your 401K
contribution to $16500 for 2011 and 2012. In this maneuver, you don't need
to pay more tax. But you have more $20000 in Roth IRA grow in tax free,
compared with $20000 in taxable account. |
s********n
发帖数: 4535 | 2 smart
可惜没有traditional IRA
【在 f******e 的大作中提到】
: Assume you are contributing to 401K only $6500 per year because you'd like
: to have more fluid savings. And you have $20000 in IRA.
: You should convert $20000 into Roth IRA in 2010, and increase your 401K
: contribution to $16500 for 2011 and 2012. In this maneuver, you don't need
: to pay more tax. But you have more $20000 in Roth IRA grow in tax free,
: compared with $20000 in taxable account.
|
s**********v
发帖数: 1379 | 3 火速开一个行吗
【在 s********n 的大作中提到】
: smart
: 可惜没有traditional IRA
|
h****d
发帖数: 358 | 4 hahaha, the reasoning is funny. you should always contribute $16500 to 401(k).
For existing traditional IRA, whether or not to convert depends on:
1. Is your tax rate higher now or after you retire? If now it is higher, do
not convert. Otherwise, convert! Here I assume that your traditional IRA is
pre-tax money, if it is non-deductible IRA (or after-tax money), you always
should convert!
2. If you expect the rate is about the same, the traditional IRA and ROTH
IRA should give the same return, meaning that you contribute 1 dollar now
pre-tax money in a tax-deferred account, or you contribute $0.6 after tax
money to grow tax free, they are the same assuming that the tax-rate is 40%
fixed. In this case, you should ask, if you have extra money to pay the
conversion tax? If yes, you should convert, because equivalently, you
contributed more. After conversion, you contributed $1.4 in pre-tax money or
$1 after-tax money.
3. The third question to ask, Do you need this money or you want to save it
for your children? If it is for your children, then convert since ROTH does
not require minimum distributions.
The benefit for converting to ROTH this year is that your tax due to
conversion can be paid in 2011 and 2012 return. It is like a free loan for
you on the tax.
【在 f******e 的大作中提到】
: Assume you are contributing to 401K only $6500 per year because you'd like
: to have more fluid savings. And you have $20000 in IRA.
: You should convert $20000 into Roth IRA in 2010, and increase your 401K
: contribution to $16500 for 2011 and 2012. In this maneuver, you don't need
: to pay more tax. But you have more $20000 in Roth IRA grow in tax free,
: compared with $20000 in taxable account.
|
z***e
发帖数: 18 | 5 Can you analyze a case for me
From previous employer 401k account, still got 80k there. Did not roll over
to current employer 401k account.
Currently Family income 90k/year. Maxed out 401k already. And obviously we
can still contribute to Roth this year.
If convert the 80k into a Roth IRA, does this mean:
1) our income for this year is 170k?
2) we can not contribute to Roth this year? |
t*m
发帖数: 4414 | 6 1) you can spead 80K before-tax money in 2010 and 2011
2) you can contribute to a "non-deductible traditional IRA" and immediately
convert it to roth IRA. Everybody can do this (only in 2010)
over
【在 z***e 的大作中提到】
: Can you analyze a case for me
: From previous employer 401k account, still got 80k there. Did not roll over
: to current employer 401k account.
: Currently Family income 90k/year. Maxed out 401k already. And obviously we
: can still contribute to Roth this year.
: If convert the 80k into a Roth IRA, does this mean:
: 1) our income for this year is 170k?
: 2) we can not contribute to Roth this year?
|
z***e
发帖数: 18 | 7 Thanks
One more thing that I don't understand about the rational for 401k ->Roth
Why people think they will have 'Higher' tax rate when they retire?
How could that be possible when you earn 100k/yr now and after retirement,
you will only withdraw say, 30k(from your 401k account) to just cover your
normal life expense.
Educate me pls. |
h****d
发帖数: 358 | 8 1) you can spead 80K before-tax money in 2010 and 2011
True (this treat only applies to 2010 conversion). More accurately, the tax you owe due to 80k conversion can be spread into 2011 and 2012. That is to day, you do not need to pay it in your 2010 tax return.
2) you can contribute to a "non-deductible traditional IRA" and immediately
convert it to roth IRA. Everybody can do this (only in 2010)
Partially right. Yes everybody can do this (and should do it if you have
extra money). You can do it starting 2010, and you can also do it in the
future unless the congress changes his mind.
immediately
【在 t*m 的大作中提到】
: 1) you can spead 80K before-tax money in 2010 and 2011
: 2) you can contribute to a "non-deductible traditional IRA" and immediately
: convert it to roth IRA. Everybody can do this (only in 2010)
:
: over
|
h****d
发帖数: 358 | 9 1. Some people can be rich after they retire. For example, you accumulated 5
million for your retirement and your income in retirement might be high
2. There is a risk that the congress will increase the tax rate given the
huge deficit we are facing.
Therefore, if you think there is uncertainty on the tax rate in the future,
I recommend that you contribute to both 401(k) and ROTH 401(k) or their
equivalent. This is "tax-rate" divercified.
【在 z***e 的大作中提到】
: Thanks
: One more thing that I don't understand about the rational for 401k ->Roth
: Why people think they will have 'Higher' tax rate when they retire?
: How could that be possible when you earn 100k/yr now and after retirement,
: you will only withdraw say, 30k(from your 401k account) to just cover your
: normal life expense.
: Educate me pls.
|
t*m
发帖数: 4414 | 10
immediately
sometime, not everybody can do traditional IRA -> roth convertion, there
is a income limit
【在 h****d 的大作中提到】
: 1) you can spead 80K before-tax money in 2010 and 2011
: True (this treat only applies to 2010 conversion). More accurately, the tax you owe due to 80k conversion can be spread into 2011 and 2012. That is to day, you do not need to pay it in your 2010 tax return.
: 2) you can contribute to a "non-deductible traditional IRA" and immediately
: convert it to roth IRA. Everybody can do this (only in 2010)
: Partially right. Yes everybody can do this (and should do it if you have
: extra money). You can do it starting 2010, and you can also do it in the
: future unless the congress changes his mind.
:
: immediately
|
|
|
h****d
发帖数: 358 | 11 I do not think so. The new law says the income cap on the conversion is
removed starting from 2010. And you can spread the 2010 conversion tax into
2011 and 2012 tax return.
Can you point me the resource of your information if you believe that the
conversion only can be done in 2010?
Thanks,
【在 t*m 的大作中提到】
:
: immediately
: sometime, not everybody can do traditional IRA -> roth convertion, there
: is a income limit
|
t*m
发帖数: 4414 | 12 I am wrong, before 2010, not everybody can do roth conversion
into
there
【在 h****d 的大作中提到】
: I do not think so. The new law says the income cap on the conversion is
: removed starting from 2010. And you can spread the 2010 conversion tax into
: 2011 and 2012 tax return.
: Can you point me the resource of your information if you believe that the
: conversion only can be done in 2010?
: Thanks,
|
t*****l
发帖数: 2658 | 13 如果401k都放满了
IRA转Roth还合适吗？这个要交多少税和罚款啊？是和当年的收入叠加算税吗？
【在 f******e 的大作中提到】
: Assume you are contributing to 401K only $6500 per year because you'd like
: to have more fluid savings. And you have $20000 in IRA.
: You should convert $20000 into Roth IRA in 2010, and increase your 401K
: contribution to $16500 for 2011 and 2012. In this maneuver, you don't need
: to pay more tax. But you have more $20000 in Roth IRA grow in tax free,
: compared with $20000 in taxable account.
|
b**i
发帖数: 257 | 14 I thought about this earlier this year. I even called Fidelity about how to
do it. Unfortunately, there is one problem in the convertion process. You
can't just setup a new IRA (after tax) and convert it to Roth tax free. You
HAVE to convert proportionally from all your retirement account. For most
people already have 401k and a lot of money in it, it means that whatever
amount you want to convert, a large potion would come out of your 401k
account and you have to pay tax/penalty for it. It may still make sense for
some people, but definitely not no-brainer.
immediately
【在 t*m 的大作中提到】
: 1) you can spead 80K before-tax money in 2010 and 2011
: 2) you can contribute to a "non-deductible traditional IRA" and immediately
: convert it to roth IRA. Everybody can do this (only in 2010)
:
: over
|
t*m
发帖数: 4414 | 15 I don't believe you have to count 401K. do you mean rollover IRA (from a
401K)?
to
You
for
【在 b**i 的大作中提到】
: I thought about this earlier this year. I even called Fidelity about how to
: do it. Unfortunately, there is one problem in the convertion process. You
: can't just setup a new IRA (after tax) and convert it to Roth tax free. You
: HAVE to convert proportionally from all your retirement account. For most
: people already have 401k and a lot of money in it, it means that whatever
: amount you want to convert, a large potion would come out of your 401k
: account and you have to pay tax/penalty for it. It may still make sense for
: some people, but definitely not no-brainer.
:
: immediately
|
b**i
发帖数: 257 | 16 Thanks for the reminder. I called fidelity again. You are right, 401k are
not considered. I do have rollover IRA myself which prevent me from doing
tax free conversion. But I can do this for my wife who only has 401k account
. So here are what I gathered so far:
1) If you are married, you must file your tax return together
2) If you have any IRA account, all balance must be considered when the
conversion happens. Say if you have roller IRA (pre tax) or traditional IRA
that you claimed tax deduction on in the past, the pre tax dollars will be
taxed (but no penalty) during the conversion.
3) The portion that will be taxed is based on the ratio of pre and post tax
dollar in all your IRA account combined.
To summarize, if you're over the limit to contribute to Roth (and still want
to). For people with only 401k account, the conversion is a great way to
get around the income limitation.
Now, experts PLEASE correct me if there is anything wrong here. :D
【在 t*m 的大作中提到】
: I don't believe you have to count 401K. do you mean rollover IRA (from a
: 401K)?
:
: to
: You
: for
|
G*******m
发帖数: 16326 | 17 最好问问IRS。
这个转换有漏洞，IRA和401K可能需要统一考虑。
在税务上面不要想当然，里面有一些陷阱，合法的并不一定合理，合理的不一定合法。 |
c*****x
发帖数: 429 | 18 I thought IRAs rolled over from 401k are basically the same as (deductible)
traditional IRAs. You are probably talking about nondeductible IRAs vs.
deductible IRAs, which could be commingled if you own both and want to do
Roth conversion.
IRA
【在 b**i 的大作中提到】
: Thanks for the reminder. I called fidelity again. You are right, 401k are
: not considered. I do have rollover IRA myself which prevent me from doing
: tax free conversion. But I can do this for my wife who only has 401k account
: . So here are what I gathered so far:
: 1) If you are married, you must file your tax return together
: 2) If you have any IRA account, all balance must be considered when the
: conversion happens. Say if you have roller IRA (pre tax) or traditional IRA
: that you claimed tax deduction on in the past, the pre tax dollars will be
: taxed (but no penalty) during the conversion.
: 3) The portion that will be taxed is based on the ratio of pre and post tax
|
t*m
发帖数: 4414 | 19 I called fidelity this afternoon. The answer was, only deductible IRAs are
affected (tax-wise). Rollover IRA will not be affected.
second, if there is bad tax consequences, we can re-characterize the roth
IRA (converted from traditional IRA in 2010) back to traditional IRA by 04/
15/2011.
)
be
【在 c*****x 的大作中提到】
: I thought IRAs rolled over from 401k are basically the same as (deductible)
: traditional IRAs. You are probably talking about nondeductible IRAs vs.
: deductible IRAs, which could be commingled if you own both and want to do
: Roth conversion.
:
: IRA
|
b**i
发帖数: 257 | 20 There two possibilities here.
1) If you have a traditional IRA in which you claimed tax deduction, then it
's the same as a rollover IRA. Both of them are pre tax dollar. This new
rule isn't useful.
2) If you are over certain income limit, the money you put into traditional
IRA can't be deducted from tax, then the money you put in there is already
taxed (post tax dollar). The new rule is useful in that if your family
income is over the Roth contribution limit (AGI $176k this year) and you
still want to contribute to Roth. This is a work around. That is: setup
traditional IRA, then fund with after tax money, then convert to Roth tax
free. (This is assuming you don't have other pre tax IRA account, 401k is OK
).
The above is discussed and confirmed by Fidelity advisor. But he still
recommended me to ask tax advisor to make sure.
)
【在 c*****x 的大作中提到】
: I thought IRAs rolled over from 401k are basically the same as (deductible)
: traditional IRAs. You are probably talking about nondeductible IRAs vs.
: deductible IRAs, which could be commingled if you own both and want to do
: Roth conversion.
:
: IRA
|
|
|
t*m
发帖数: 4414 | 21 this is different from what I learned this afternoon when calling fidelity
advisors
he says, the overall IRA (pre-tax money) has nothing to do with converting a
traditional IRA to roth IRA.
(the rollover IRA is at Vanguard); and the rollover IRA will not affect the
tax consequence of the roth conversion.
do you know which advisor you discussed with?
it
traditional
OK
deductible
do
【在 b**i 的大作中提到】
: There two possibilities here.
: 1) If you have a traditional IRA in which you claimed tax deduction, then it
: 's the same as a rollover IRA. Both of them are pre tax dollar. This new
: rule isn't useful.
: 2) If you are over certain income limit, the money you put into traditional
: IRA can't be deducted from tax, then the money you put in there is already
: taxed (post tax dollar). The new rule is useful in that if your family
: income is over the Roth contribution limit (AGI $176k this year) and you
: still want to contribute to Roth. This is a work around. That is: setup
: traditional IRA, then fund with after tax money, then convert to Roth tax
|
h****d
发帖数: 358 | 22 我听到的版本是，PRE-TAX和AFTER-TAX都有的话会MINGLE的，解决办法是把PRE-TAX转
到目前的401K就可以了。
a
the
【在 t*m 的大作中提到】
: this is different from what I learned this afternoon when calling fidelity
: advisors
: he says, the overall IRA (pre-tax money) has nothing to do with converting a
: traditional IRA to roth IRA.
: (the rollover IRA is at Vanguard); and the rollover IRA will not affect the
: tax consequence of the roth conversion.
: do you know which advisor you discussed with?
:
: it
: traditional
|
b**i
发帖数: 257 | 23 It was Bill sth. I don't remember exactly.
a
the
【在 t*m 的大作中提到】
: this is different from what I learned this afternoon when calling fidelity
: advisors
: he says, the overall IRA (pre-tax money) has nothing to do with converting a
: traditional IRA to roth IRA.
: (the rollover IRA is at Vanguard); and the rollover IRA will not affect the
: tax consequence of the roth conversion.
: do you know which advisor you discussed with?
:
: it
: traditional
|
t*m
发帖数: 4414 | 24 will your employer's 401K plan take your IRA?
fidelity
converting
【在 h****d 的大作中提到】
: 我听到的版本是，PRE-TAX和AFTER-TAX都有的话会MINGLE的，解决办法是把PRE-TAX转
: 到目前的401K就可以了。
:
: a
: the
|
h****d
发帖数: 358 | 25 yes, I did roll my pretax IRA into 401k, and then contributed after-tax IRA
and converted the after-tax IRA to ROTH IRA.
Ray Lucia show recommended this method.
【在 t*m 的大作中提到】
: will your employer's 401K plan take your IRA?
:
: fidelity
: converting
|
t*m
发帖数: 4414 | 26 right. but how many employer's 401K plans receive IRA rollover?
IRA
【在 h****d 的大作中提到】
: yes, I did roll my pretax IRA into 401k, and then contributed after-tax IRA
: and converted the after-tax IRA to ROTH IRA.
: Ray Lucia show recommended this method.
|
h****d
发帖数: 358 | 27 hmm, I dunno, but ours does... :)
【在 t*m 的大作中提到】
: right. but how many employer's 401K plans receive IRA rollover?
:
: IRA
|
j**y
发帖数: 147 | 28 Does the Roth IRA have the income limit in yr 2010?
【在 f******e 的大作中提到】
: Assume you are contributing to 401K only $6500 per year because you'd like
: to have more fluid savings. And you have $20000 in IRA.
: You should convert $20000 into Roth IRA in 2010, and increase your 401K
: contribution to $16500 for 2011 and 2012. In this maneuver, you don't need
: to pay more tax. But you have more $20000 in Roth IRA grow in tax free,
: compared with $20000 in taxable account.
|
S****r
发帖数: 472 | 29 This does not make sense. If the income cap on the conversion is totally
removed after 2010, why is there a need for an income cap on Roth IRA?
I don't think IRS just wants to make fun of rich people and have them 脱裤子
放屁 （contribute regular IRA and then convert to Roth every year) while an ordinary Joe can contribute Roth directly)
into
【在 h****d 的大作中提到】
: I do not think so. The new law says the income cap on the conversion is
: removed starting from 2010. And you can spread the 2010 conversion tax into
: 2011 and 2012 tax return.
: Can you point me the resource of your information if you believe that the
: conversion only can be done in 2010?
: Thanks,
|
