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What is the best way to maximize my conversion of a traditional IRA to a Roth IRA in 2010?

I am currently at a company and have a 401(k). If I am able to move this money to a traditional IRA, will I be able to convert it to a Roth IRA in 2010? I currently have a Roth IRA and contribute the maximum allowed per year. I want to be able to put as much money in it as possible to take advantage of the tax-free growth.
Also, are there any other means of contributing to a traditional IRA in order to convert to a Roth in 2010 besides transferring my 401 (k)?

This entry was posted on Sunday, June 20th, 2010 at 1:01 am and is filed under Business Ian. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

2 Responses to “What is the best way to maximize my conversion of a traditional IRA to a Roth IRA in 2010?”

  1. Unfortunately, no. The government limits the amount you can contribute in IRA accounts collectively to $4,000 if your under 50 in 2007. It doesn’t matter how you split up your contributions (i.e. 2,000 in a traditional IRA and $2000 in a Roth). The total amount you contribute to an IRA in general is limited to $4,000.

    If you want to keep contributing tax free money for retirement the only option you have is your 401(k).

    Also on a side note, be careful when you convert your Traditional IRA over to a Roth. You will have to pay taxes on what ever money you transition over.

  2. You can not convert a 401K to an IRA until you leave the company. As far IRA contributions if you are eligible. You can make them to a ROTH IRA now. If you are not eligible for the ROTH you can contribute to an non-deductible IRA(that converts to a ROTH).

    This is a pretty tricky situation, it would be a good idea to see a fee-only financial adviser.

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