The exact opposite is true for a Roth IRA.
Obviously, we all don’t have $100,000 cash lying around, but we do have equity in our homes which we can reposition, or other real estate such as commercial estate property. So, what’s next? This conversion, over 18 trillion dollars has not been taxed in qualified retirement money. That’s a great asset allocation model. And do you still have money left in treasury securities, or CDs, and what are you going to get out of that – 2 or 3%? With Roth on Roids, the principle is guaranteed; you will never lose your money because you’re guaranteed by an insurance company whose sole purpose is to roll the money tax free and then borrowing against it the cash builds up tax free. You have to pay the taxes when you buy the apple tree (i.e. before you pick the apples). Which is better? No earned income, no age qualifications. Now, let me ask you a question. You pay the income tax when you buy the apple tree, you nurture the apple tree and make it grow and finally, you can pick as many apples as you want without incurring an income tax. In other words, you don’t have to pay taxes when you pick the apples (i.e. after your already purchased the apple tree); in spite of that, with the Roth IRA there is no guarantee of a return and you’re going with the ups and downs of the stock market, the commodity market or the real estate market. To pay the taxes when you buy the apple tree or when you pick the apples? With such a significant asset class under their control (this includes the Roth IRA) they can easily and spontaneously change the rules and apply some new tax upon the IRA account or they can just as easily require a mandatory distribution. In 2010, you can withdraw the money, pay the tax, and put it does mutual funds work in a Roth. However, that’s another discussion for another day.Contact your financial planner or accountant for more information on the Roth IRA on Roids and relocating your real estate or Call Best IRA for more information about your own specific IRA conversion retirement planning. They also seem to be haphazardly making and printing money without major forethought – a trillion dollars here and a trillion dollars there. Your money can grow at an average of 7% tax free and currently you can borrow at 4 to 5% so, financially, the numbers make a lot of sense. In 2010, as it stands right now anyway, if you decide to convert your traditional IRA to a Roth IRA, the government is going to drop the limitations and they’re going to allow you to pay the income tax due over a two year period – that is, in 2011 and 2012. You save the taxes when you buy the apple tree and you pay the taxes when you pick the apples. The government as of late has been buying banks and significant shares of the bankrupt General Motors and almost defunct Ford. Here is another example, if you are 45 years old and deposit $100,000, at 65, you will have $600,000 of tax free income. Do you want to eventually get tax-free retirement income? With this being said, there is a word of caution. Now, if you have cash lying around, that’s even better. The third choice is to take the money, pay the taxes and go into a Roth on Roids. Well, isn’t it better to put it to work in something that give you a guaranteed minimal return and the principle is guaranteed? Has your accountant or financial planner asked if you borrowing from 401k have given any thought to converting your traditional IRA to a Roth?