New Roth IRA Rules

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I thought this was a great overview of how the rule change for Roth IRAs will work.  The upshot is that the income restrictions on who may open and contribute to a Roth are changing as of January 1st 2010. 

From WSJ via Yahoo Finance:
Starting Jan. 1, the income limits that have prevented many individuals…from converting a traditional IRA or employer-sponsored retirement plan to a Roth will be eliminated. The change—one of the biggest and most important on the IRA landscape in years—will widen the entryway to one of the best deals in retirement planning. With a Roth IRA, virtually all income growth and withdrawals are tax-free.

Because there is a high probability that tax rates have only one direction to go (guess which?) to pay for our bailout/ stimulus plans, it is probably a great time to look into what options make sense for your own non-taxable retirement accounts. 

The whole article is here: 

 Making a Good Deal for Retirement Even Better (Yahoo/WSJ)

What's been said:

Discussions found on the web
  1. Britt (Your Roth IRA) commented on Jul 14

    @Joshua – Thanks for bringing up this article. Unfortunately, quite a few of the people who could benefit most from this knowledge are still unaware of the impending changes, so the more people tout this the better!

    The impact of the 2010 Roth IRA conversion rule change can NOT be understated. While income limits will remain in effect for Roth IRA contributions, the income limit on Roth IRA conversions is eliminated, and that effectively eliminates the income restrictions on contributing to a Roth IRA.

    Since anyone, regardless of income, can make non-tax deductible contributions to a Traditional IRA, it opens the door for anyone to contribute to a Roth IRA. If you make too much to contribute to a Roth, simply max out your non-tax deductible Traditional IRA and then convert it to a Roth IRA. It’s really that simple!

    Hopefully, as knowledge of the change spreads, more and more people will take advantage.

  2. Britt (Your Roth IRA) commented on Jul 14

    @Joshua – Thanks for bringing up this article. Unfortunately, quite a few of the people who could benefit most from this knowledge are still unaware of the impending changes, so the more people tout this the better!

    The impact of the 2010 Roth IRA conversion rule change can NOT be understated. While income limits will remain in effect for Roth IRA contributions, the income limit on Roth IRA conversions is eliminated, and that effectively eliminates the income restrictions on contributing to a Roth IRA.

    Since anyone, regardless of income, can make non-tax deductible contributions to a Traditional IRA, it opens the door for anyone to contribute to a Roth IRA. If you make too much to contribute to a Roth, simply max out your non-tax deductible Traditional IRA and then convert it to a Roth IRA. It’s really that simple!

    Hopefully, as knowledge of the change spreads, more and more people will take advantage.

  3. Britt (Your Roth IRA) commented on Jul 14

    @Joshua – Thanks for bringing up this article. Unfortunately, quite a few of the people who could benefit most from this knowledge are still unaware of the impending changes, so the more people tout this the better!

    The impact of the 2010 Roth IRA conversion rule change can NOT be understated. While income limits will remain in effect for Roth IRA contributions, the income limit on Roth IRA conversions is eliminated, and that effectively eliminates the income restrictions on contributing to a Roth IRA.

    Since anyone, regardless of income, can make non-tax deductible contributions to a Traditional IRA, it opens the door for anyone to contribute to a Roth IRA. If you make too much to contribute to a Roth, simply max out your non-tax deductible Traditional IRA and then convert it to a Roth IRA. It’s really that simple!

    Hopefully, as knowledge of the change spreads, more and more people will take advantage.

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