And he never pays a cent in taxes on the money, since his income 50 summers earlier fell below the minimum for a required tax filing. Conn. His wife, Staci, stays home with the couple's toddler and is expecting their second child. The Rogerses are trying to be smart about their golden years. I'm very into saving for retirement. He said he has intended to call his mutual fund company to find out whether he should switch his traditional IRA to a Roth IRA, but he hasn't gotten around to it yet.
Experts recommend converting before the end of the year.
The IRA rules allow you to spread the tax burden across four years if you convert in 1998. You can convert in future years, but the taxes must be paid in full during that year. If you think a Roth might benefit you, convert now, Healy said. Some investors have converted and recharacterized repeatedly this year as the stock market swooped and soared. You must, of course, pay income tax on the money at the end of the year.