Roth IRA's

[bughunter]

two options,
contribute to a new account (Roth) or convert some of a traditional IRA into a Roth.

am i taxed the same in each scenario ???

[Chad_E]

Your Roth contributions would be post tax (taxed before the contribution) and then would grow tax free after that. I would also not be taxed when you pull it out in the future (because it was already taxed).

From what I understand to convert a traditional to a Roth, they will tax it before it is moved. I don't know the details on that but I think it ends up being more than if you would have been contributing to a Roth all along.

Don't know if that helps.

[Slewfoot]

The Roth IRA is for money that has already been taxed. The IRA is taxed deferred, you will pay taxes on it has you withdraw it. The Roth will not be taxed when you withdraw it. If you convert from traditional to Roth, got to pay the tax going in.

[Brooks]

I would start a new roth that way the traditional will not be taxed until a later time when possibly you are in a lower tax bracket and you take full advantage of deferring the tax.

[Shane]

Contributing new money to a Roth does not affect your tax bill for the current year. You contribute after tax money that you have already earned.

Converting a traditional IRA to a Roth IRA results in additional taxable income in the amount of dollars that you convert, so it increases your tax bill for the year you convert. It still might be the best move for the longterm, depending on how long you have between now and retirement, your pre- and post-retirement tax brackets, etc....

Talk to your CPA or financial advisor about your situation.

[Mike D]

Roth IRA's

I've always wondered, in a traditional IRA, what part are you taxed on; the contribution, the growth or both?

[Shane]

I've always wondered, in a traditional IRA, what part are you taxed on; the contribution, the growth or both?

Contributions are pre-tax. You pay tax on everything that you withdraw (contribution and earnings) when you withdraw it.

[lilavidhunter]

I've always wondered, in a traditional IRA, what part are you taxed on; the contribution, the growth or both?

You are taxed on both. But only when you take withdrawals

[dustoffer]

My traditional was started in '82 and when my advisor and I ran the numbers on conversion about 3 years ago, I was in IRS shock--so I still have my traditional. If your accumulated value is not so large, might pay, but in my case-no way.

[dharris]

The way things are going I would be saving things that can't be traced. They WILL be coming after the IRA , roth and reg I guarantee it. That is the biggest pot of money right now and they are eyeing it.

[Dchilds]

You can also consider converting a portion of your traditional IRA.

[bughunter]

Thanks for the input