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Bill, Enrolled Agent
Category: Tax
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Experience:  EA, CEBS - 35 years experience providing financial advice
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I am a 75 year old person with a traditional ira which i would

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I am a 75 year old person with a traditional ira which i would like to convert to a Roth ira. I have no wage income, only ss and a pension plus earned income from investments.

I have been told that this can not be done . Please advise.

Thank you

It may not be a good idea for you to convert. Here is why:




"You might have to pay higher Medicare premiums or have your Social Security payments taxed if you do a Roth IRA conversion. That can happen if you are receiving these benefits and do a Roth conversion, Slott said.


"In general, Social Security benefits are excluded from the gross income of a taxpayer and are therefore not taxed," he said. "However, depending on how much other income an individual has, anywhere from 50% all the way up to 85% of their Social Security income can be included in gross income, resulting in a higher tax bill for that year."

What's more, he said, "Medicare Part B premiums are based on income. For 2010, joint taxpayers will remain at the lowest premium levels as long as they have income of $170,000 or less ($85,000 for those filing single). From there, premiums progressively increase until joint taxpayers have above $428,000 in income ($214,000 for those filing single). Conversion of a large IRA or plan balance could move you into a higher premium bracket, potentially costing a couple around $6,000 extra in Medicare premiums for 2010."


So, this may be why your advisers are indicating you should not convert to a ROTH IRA.

Customer: replied 7 years ago.
my question is not whether I should convert a portion of my tradition IRA to a Roth but can I do this under the current tax law considering I have no wage income..

Thank you for clarifying what you were asking.


No, you cannot.


"Question: Are contributions to Roth IRAs limited by "earned" income in the same manner that contributions to traditional IRAs are?


Answer: Yes. You must have earned income at least equal to the amount you contribute to Roth accounts for the year. Net income from self-employment counts just the same as wage or salary income. If you file jointly, you and your spouse can each contribute $5,000 for 2010 as long as one spouse (or both) has at least $10,000 of earned income. As explained above, you can contribute another $1,000 if you are age 50 or older as of 12/31/2010.


This is from this article:

Roth IRAs: You Wanted to Know at


If your question is can you convert to a Roth IRA rather than can you make a Roth IRA contribution then the answer is yes. You do not have to have earned income from working in order to be eligible to convert to a Roth IRA. Anyone can convert a traditional IRA to a Roth IRA at any age and regardless of whether they have earned income or not.

Edited by Bill on 4/1/2010 at 10:49 PM EST
Customer: replied 7 years ago.
I don't want to contribute to an existing Roth IRA, I want to create a Roth IRA and convert a portion of an existing traditional IRA to it. Isn't that different from a contribution?
Yes that is different. And yes you can convert to a Roth IRA.

Pages 28 - 29 of IRS Publication 590 discusses conversions -


Edited by Bill on 4/1/2010 at 11:06 PM EST
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience: EA, CEBS - 35 years experience providing financial advice
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