Fixed it Friday: 06-03-11

4 06 2011

Have we all heard of Roth IRA Conversions?  No?  Neither has Amelia.

Amelia is back with another update.  Up until last week she had a Traditional IRA which was then converted in a Roth IRA.  With a Roth IRA conversion, the participant must pay taxes on the amount converted from the Traditional IRA into the Roth IRA.  Taxes can be paid this year or during the year 2012.  When the conversion is completed, funds within the Roth IRA grow tax free without the enforcement of Required Minimum Distributions.

Here is what Amelia had to say during her journey towards converting her IRA:

“I didn’t realize I have the option to convert my existing traditional IRA into a Roth IRA.  I’m glad it’s not too late!  I know I need to pay a little tax now but it’s on a small amount of money and then I’ll never have to worry about the future taxes  on what will have grown to hopefully a lot!  I double checked it out with the online calculator and plugged in estimates.


I previously deducted the traditional IRA on my taxes.  I understand I have to pay taxes now that I am doing a conversion.  But is there any other consequence?  Maybe I can speak with an accountant.”

Let’s hear it for Amelia!  She’s continuing to learn and explore all the options available regarding personal finance.




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