While the law allows investors to convert a traditional IRA to a Roth, the income cut-off for that is even lower: $100,000, for single and married couples who file jointly.
Soon, though, these barriers to a Roth IRA will crumble.
Starting in 2010, the income limit on Roth conversions will disappear, providing a backdoor way for anyone who has an IRA to own a Roth.
Brokers and financial planners are eagerly informing their clients of this opportunity to shelter their retirement savings from taxes.
Many are advising their clients to put money in a non-deductible IRA now so they can convert it next year.
But converting isn’t for everyone. Reasons you shouldn’t convert your IRA to a Roth:
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