Thinking about a Roth conversion? If you have an IRA, consider this 'bear market bonus'

If you’ve been thinking about converting a traditional IRA to a Roth IRA, here’s the good news: This year’s market turmoil may be giving you a golden opportunity to do it.

The reason I say “theoretically” is because I have a low-level but persistent fear that Congress, faced with budget shortfalls in decades to come, may suddenly redefine Roths as “loopholes” or “giveaways” to the rich , and start taxing them twice. Surging inflation in the past year is strengthening, slightly, the arguments in favor of Roths. That’s because it will threaten more retirees with tax on their Social Security benefits, through the phenomenon known as “bracket creep”: Your nominal income rises, but the tax thresholds or brackets don’t.

Naturally, at the time they said it would only apply to the highest earners: About 10% of retirees. But here we are and it now applies to about half. And the percentage is rising steadily every year.

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Source: MarketWatch - 🏆 3. / 97 Read more »

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Source: MarketWatch - 🏆 3. / 97 Read more »