Raymond James | Professionally Speaking | To Roth or Not? It’s a Question for 2010

No matter how much anyone makes, in 2010 investors saving for retirement will have an opportunity to convert traditional IRAs into Roth IRAs, paying no federal taxes on the transaction until 2011 and 2012.* Before 2010, anyone making $100,000 or more annually couldn’t make such conversions. The advantages of the Roth IRA are well known. Because they are funded with after-tax dollars, qualified distributions are tax-free, although unless certain criteria are met, Roth owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. As no withdrawals are actually required, high-net-worth individuals can pass untouched Roth accounts to future generations. Conversion isn't for everyone, including those who expect to be in a lower tax bracket or who would have to use other retirement funds to pay the tax, says Susan Hartman, CFP^®, a tax and estate planning consultant with the firm’s Financial Planning Group, in this edition of Professionally Speaking, hosted by Larry Pugliese.

For personalized advice on whether converting your traditional IRA funds into a Roth account could benefit you, please contact a Raymond James financial advisor.

*The option to spread the federal income taxes over two years applies to 2010 only. For conversions occurring after 2010, the federal income taxes due must be paid in full the following tax year going forward. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

Susan L. Hartman, JD

Tax & Estate Planning Consultant
Financial & Retirement Services
Raymond James & Associates

As a tax and estate planning consultant, Susan is responsible for educational and technical financial planning support for Raymond James Associates and financial advisors. She received her bachelor’s degree in finance from the University of South Florida and her Juris Doctorate from Stetson University College of Law.

Susan has been a speaker at regional and national conferences and teaches continuing education programs on retirement, estate, education and tax planning, as well as risk management, qualified retirement plans and required minimum distributions. She serves on the West Coast Employee Benefits Council and the Pinellas County Estate Planning Council and is also a member of the Florida Bar Association, the American Bar Association and the Florida Association of Women Lawyers. In addition, she is involved in several community organizations.

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