I find it almost impossible to believe this:
http://www.fool.com/retirement/general/2010/08/23/this-roth-trick-is-a-sure-thing.aspx
http://www.fool.com/retirement/general/2010/08/23/this-roth-trick-is-a-sure-thing.aspx
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Can this really be??
- Thread starter WunderDog
- Start date
Birchtree
Well-known member
The best thing about a Roth is you get free dividend reinvestments if you buy stocks. That is an auto-pilot system that pays four times per year and you may profit from capital gains that are tax free. There is no minimum distribution at age 70 and the Roth is a perfect mechanism to pass tax free assets to a younger heir.
But did you read where if the Roth takes a tumble, you can "Recharacterize your conversion" converting it back to a traditional IRA as I read it with no loss!
Am I misiterpreting what he is saying or is it true that you can "undo the wholething, and pretend it never happened".
That just sounds too good to be true, and you know what they say about that!
Am I misiterpreting what he is saying or is it true that you can "undo the wholething, and pretend it never happened".
That just sounds too good to be true, and you know what they say about that!
Birchtree
Well-known member
Nothing is free my friends. If you convert to a Roth and take a hit on your value you can reconvert back to your regular IRA but only with the money you have left. The Roth is a beautuful way to accumulate an asset base. My daughter is a new employee and we opted for a Roth 401(K) plan. She is accumulating large cap stocks, value stocks, and international large caps via three mutual funds - no fear on her part. If you make a gain in your Roth and then wish to convert back to your original IRA you will be limited on what you can convert - you just keep the profit.
Birchtree
Well-known member
By the way - my wife has the same available one time option to reconvert her defined contribution retirement plan to a defined benefits plan. When the calculations are made and she is money short she'll have to pay up the difference. If her defined contribution plan has an excess she gets to keep the difference as cash.
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