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Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55153
Experience:  29 years of experience as a tax, real estate, and business attorney.
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I have a 401k that Ive maintained through a previous employer.

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I have a 401k that I've maintained through a previous employer. I'm 52 and considering rolling the 401k into a Roth. I understand that I can split the income on my 2011 and 2012 tax returns. It sounds like I would pay the tax bill from cash. Then all subsequent earnings on the Roth would be tax free. For me, tax bill would be about $100k over this period. I know I would have access to the account after 5 years.

My question: Isn't this just betting on the tax rates being higher after I'm 59 1/2? Otherwise why would I take this big tax right now?

Good evening. Actually, you are betting on two things..the tax rates being higher in the future and the fact that your assets will be appreciating and that such appreciation won't be subject to any tax. But, you have a point, because your rates are likely to be higher now when you are working than later when you are not. So, unless you think you are going to have a lot of appreciation, you wouldn't make the decision.



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The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.


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