Most boomers plan to keep their traditional IRAs intact instead of turning their tax-deferred savings into tax-free retirement income next year, a new survey concludes.
The survey finds that 73% of boomers who own an IRA are not planning to convert their traditional IRA to a Roth IRA in 2010, when the household limit of $100,000 in modified adjusted gross income is scheduled to be lifted. Investors who convert in 2010 can pay the tax bill over a 2-year period, points out USAA, San Antonio, Tex.
Investors who convert in 2010 can pay the tax bill over a 2-year period, notes USAA, the marketing name of United Services Automobile Association., a financial service firm providing insurance, banking and investment services to U.S. military and their families.
The upcoming Roth IRA conversion changes may be a silver lining for baby boomers with recession-battered IRAs. But 57% of those surveyed were not even aware that income limits on Roth IRA conversions are scheduled to be eliminated next year. And conversion plans are not more prevalent among high-income households–those who have a household income of $100,000 or more:
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