IRA Account Transfer

In the last several weeks and months my stock portfolio has had some major and minor changes. Last week a transferred all my family’s IRAs into Roth IRAs. You might wonder why I did this. I thinkn the current tax rate for income are very low, mainly because of the Bush Administration’s tax cuts. Because of the current and future financial mess the country is in, I do not think tax rates will be this low again in my lifetime. Medicare, Medicaid, and Social Security are a mess; defense spending is ridiculously high, we are borrowing more and more money to fund these prgrams along with the costly War on Terror. I do not think the economy will grow to the point where it will just pay for itself on the current tax rate and programs we have.

Paying the taxes out of the traditional IRAs and rollover IRAs will be a short-term loss in the value of our retirement portfolio. However, in the long-run this will be a huge gain for us because all the retirement money we have now will not incure any tax consequences once we remove it for our retirement.

Many might disagree with this strategy, but that is my story and I am sticking with it.

Written by Nagel on June 3rd, 2007 with no comments.
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