Time to move the nest egg?

Changes in Roth IRA rules next year could benefit your retirement fund
Brian J. O'Connor / Detroit News Finance Editor
Posted by Jonathan Tse



Having money means having choices, and soon the two or three people left in the U.S. with any kind of sizeable income will have to make one: whether to convert their IRAs.
Starting in 2010, high-income savers can convert their regular Individual Retirement Accounts to Roth IRAs. This allows them to pay taxes on the accounts now and forever escape taxes on future investment gains.
The timing couldn't be better for anyone who's seen their IRA balance drop in the market meltdown, since many personal finance experts expect tax rates to go up in the next few years. Converting a regular IRA to a Roth now allows savers to trim their tax bills two ways: They pay taxes on their temporarily lower balances now and do it at the current lower tax rates, instead of paying higher tax rates on bigger balances later, when their accounts have (we hope) regained their losses.

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