03.18.2010 / Roth IRA Restrictions Lift

Beginning in 2010, the IRS eliminated income restrictions to allow anyone, regardless of their income level, to move or convert money from a traditional IRA or 401k to a Roth IRA. Now you have to wonder, should I convert my Traditional IRA?

"Beginning in 2010 the IRS eliminated income restrictions to allow anyone, regardless of their income level, to move or convert money from a traditional IRA or 401k to a Roth IRA."

Here are some key considerations when determining if a conversion is right for you, and information about next steps.*

The longer you expect your assets to remain within the IRA, the more you could benefit from a Roth IRA, since it provides federal tax-free growth. Roth IRA distributions could be tax free for “qualified distributions”, meaning if the owner of the account has reached 59 1/2 in age and has held assets in the Roth IRA for a minimum of 5 years.

Withdrawal Requirements:
Also, something to consider is that Roth IRAs have no withdrawal requirements. Therefore, account holders can allow their money to stay in the Roth IRA much longer, with the hope of generating additional tax-free income. With a Traditional IRA, you will be required to take a minimum distribution beginning at age 70 1/2.

Conversion Tax:
A Roth IRA conversion needs to be evaluated based on each individuals needs and the different financial and tax implications for their specific situation.* We recommend that you work with your tax advisor in determining if a Roth conversion is right for you.

*This article does not constitute legal, tax, accounting or other professional advice. Although it is intended to be accurate, neither the publisher nor any other party assumes liability for loss or damage due to reliance on this material.

Investment Products are: • Not FDIC Insured • May Go Down in Value • Not a Deposit • Not Guaranteed By the Bank • Not Insured By Any Federal Government Agency

Source: Internal Revenue Service.

Posted at 03:29 PM | Permalink
Post A Comment

The views expressed on this site may not reflect the views held by First National Bank of Omaha or any of its affiliates. The information provided through this website is not a substitute for any personal advice from a licensed professional. Use of any information or advice shall be solely at the user's own risk.

We welcome your comments. All comment submissions will be reviewed prior to being posted. If the comments are posted, they may be removed at any time. Comments will not be approved if they contain, include or involve any of the following: Obscenity; Crude, vulgar or offensive language and/or symbols; Gang signs or symbols; Derogatory characterizations of any ethnic, racial, sexual or religious groups, personal attacks of any kind towards others; Trespass or the violation of other people's rights or property; Illegal (e.g., discriminatory, harassing) or inappropriate activity, behavior or conduct (e.g., inflicting emotional distress); Any other content that is or could be considered inappropriate, unsuitable or offensive, or clearly "off-topic" as determined by First National Bank of Omaha. To protect your own privacy and the privacy of others, please do not include personally identifiable information such as Social Security Number, phone number or email address in the body of your comment.

For account related questions, please log in to First National Online at and use the secure email located in Contact Us.