Roth IRA Conversions

• IRA Account Balance:  Enter the amount of your 'Traditional' IRA account balance that you will be converting to a Roth IRA.
• Income Tax Bracket:  Enter your estimated combined Federal and State marginal income tax bracket both for the pre-retirement and post-retirement years.
• Investment Rate of Return: Enter your estimated average investment rate of return both for the pre-retirement and post-retirement years.
• Pay Tax From IRA: Enter 'Yes' to pay the income tax due from the IRA account balance or 'No' to pay the tax from another source of funds.

Conversion Account: If the income tax on the conversion is paid with funds not in the current IRA plan, a Conversion Account is created in the 'Current IRA' columns. The Conversion Account can be designated as a taxable or tax-deferred account. If the account is taxable, ncome taxes due on the investment income from the Conversion Account are withdrawn annually at the end of the year by adjusting the interest rate by the tax bracket [Investment Rate X (1 - Post-Retirement Tax Bracket)]. If the account is tax deferred, tax is paid at time of dirstribution.

Non-Deductible Contributions Included: If there are any non-deductible contributions included in your total IRA account balances, then a portion of these non-deductible contributions must also be converted along with your deductible contributions.