Quote:
Originally Posted by Stu from NYC
Interesting post and if you time converting to a Roth when you have a small income for the year yes you can come out ahead but not an easy thing to think long term about when your income drops a lot.
I was not being dismissive of people converting to a Roth but just gave my thought as to one major negative of doing so. I have thought long and hard about doing this a number of times but the opportunity cost of doing so tells me not to do it. BTW my cpa is in complete agreement with me for whatever that is worth.
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I think that converting to a Roth may make sense for someone who has a short life expectancy, doesn't need the money, and has children who are in a higher income tax bracket than they are. One of the big advantages for your beneficiaries is that they inherit the Roth account tax free, and they avoid the complicated distribution rules for inheriting a Traditional IRA.
I would also point out that one advantage to not converting to a Roth is that, if you go into a nursing home or assisted living, you can use Traditional IRA distributions to fund the cost and get huge medical tax deductions.