Ripe Time To Roth
Forbes|February 28, 2019

Between Trump’s temporary tax cuts and the stock market’s downswings, now could be the time to do a Roth conversion.

Ashlea Ebeling
Ripe Time To Roth

When Congress created Roth Individual Retirement Accounts, lawyer and CPA Jim Lange saw two ways he could personally profit. First, he decided to become an expert on the “conversion” of traditional IRAs to Roths, which he deemed “the best thing since sliced bread.” Second, a fire that broke out in the pizza parlor below his Pittsburgh office had left him with a big casualty loss and a low enough income that he himself could do a conversion in 1998, the first year the move was allowed. (Originally you had to have income below $100,000 to be eligible.) Lange and his wife, Cindy, then both in their early 40s, converted their traditional IRAs— $239,000 in all— into Roths. “If I’m wrong, I’m going down with you,’’ Lange told his clients.

Truth is, it takes a strong stomach to do a conversion, particularly when you’ve spent years looking for ways to delay paying taxes. When you convert, you accelerate a tax bill. But a combination of President Donald Trump’s temporary individual tax cuts and the stock market’s recent troubles have created a potential bull market for conversions. “A whole new class of people are now good candidates for Roth conversions,” says Lange, who runs his own financial planning firm.

This story is from the February 28, 2019 edition of Forbes.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

This story is from the February 28, 2019 edition of Forbes.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.