Metz Lewis Brodman Must O'Keefe

Metz Lewis Brodman Must O'Keefe

Posted on January 7, 2016

With the recent dip in the stock market, now may be an excellent time to consider converting your Traditional IRA to a Roth IRA.

Converting your IRA to a Roth IRA will subject your IRA to income tax at its current market value.  Doing so while the market is depressed can result in tax savings as the value of your account will be lower.  Additionally, with the market dip occurring early in the year, the tax on the conversion will be deferred until April 2017.

If the market continues to slip, the tax rules offer a mulligan, allowing the Roth to be “re-characterized” back to a traditional IRA.  If the market rises, then the Roth conversion will take advantage of the depressed market valuation for tax purposes.

There is currently no income limit to be eligible to convert an IRA.  For more information about a Roth conversion, timing restrictions, and re-characterization contact a member of our Legacy Planning Group.

To see the current stock rates, click here.

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