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The 11 richest people on the planet under 35
Get last-minute, cheap Broadway tickets
Hulu rolls out ad-free option for $11.99 a month
Babe Ruth’s New York apartment is for sale
Vera Bradley soars on results, upbeat outlook

A customer server works in a Starbucks Coffee shop in Shanghai, China, on Thursday November 01, 2007Photographer: Kevin Lee/Bloomberg News. 
Inside the strongest S&P sector, the 10 best stocks
Dow pushes bid to halt latest multiday rout

Why gold now looks more risky than stocks
Why gold now looks more risky than stocks: Reeves

Still too many gold market bulls, says Hulbert

GoPro’s stock rocked by supplier’s outlook

Intel hopes its chip retool can revive PC sales

Private sector adds 190,000 jobs in August: ADP

U.S. productivity rises at fastest pace since end of 2013
Productivity rises at fastest pace since end of 2013

Donald Trump, Hillary Clinton playing game of liar’s poker with the voters
Trump, Clinton play game of liar’s poker: Delamaide
Bush mounts ‘germophobe’ attack on Trump

Workers don’t do better in unions
Opinion: Workers don’t do better in unions
Raising wages to $15 would raise prices by 4%
LA: $15 wage will lift 600,000 out of poverty

Growing doubts among Viacom investors lead to 50% stock drop
Growing doubts among Viacom investors

China stock market to close for World War II anniversary
China tightens controls to fight capital outflows

Guide to managing money from your 20s to your 70s
Guide to managing money from your 20s to your 70s
Take your company pension, or buy an annuity?
Don’t overcomplicate 401(k) transfer to an IRA
Is this all the investing advice you’ll ever need?

Never use a market order when stocks are selling off

Uber drivers lawsuit  endangers much more than Uber
Uber will likely appeal class action decision
Uber driver suit can proceed as class-action

McDonald’s set to offer all-day breakfast

No. 1 restaurant for ‘breakfastarians’ is ...
Teacher with 111 tardies blames breakfast

Where every Fed member stands on raising rates

Rate-hike question is what Yellen didn’t want
Boston Fed president: Sept. doubt remains

What to expect at September Apple event
What to expect from the Apple event on Sept. 9
New on the shelves of your Apple Store: drones
Apple talks to Hollywood for exclusive content
Lost Apple deal leads to 40% job cut at GT

These are the cars that get the most Instagram attention
Best time to buy a new car may be just ahead
U.S. car sales are stronger than expected

10 cities in U.S. with the very worst traffic problems
Lowest Labor Day gas prices in 11 years: AAA


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Markets »

47.51MDow Volume:
Avg Vol: 111.86M
Unchanged
218
Decliners
2500
Advancers
3736
Price Chg %Chg 1 Day
Range: 1 Day
  • 1 Day
  • 5 Days
  • 1 Month
  • 3 Months
  • 6 Months
  • 1 Year
  • 2 Years
Dow
/quotes/zigman/627449/realtime 16,218 +159 0.99%
Nasdaq
/quotes/zigman/12633936/realtime 4,682 +46 1.00%
S&P 500
/quotes/zigman/3870025/realtime 1,929 +15 0.79%
GlobalDow
/quotes/zigman/629063/realtime 2,301 +6 0.27%
Gold
/quotes/zigman/662444/delayed 1,135 -5 0.42%
Oil
/quotes/zigman/2331095/delayed 43.67 -1.74 3.83%
FTSE 100
/quotes/zigman/3173262/delayed 6,083 +25 0.41%
DAX
/quotes/zigman/2380246/delayed 10,048 +32 0.32%
CAC 40
/quotes/zigman/3173214/delayed 4,555 +14 0.30%
FTSE MIB
/quotes/zigman/1482176/delayed 21,612 +161 0.75%
IBEX 35
/quotes/zigman/2759620/delayed 9,938 -55 0.55%
Stoxx 600
/quotes/zigman/2380150/delayed 354 +1 0.27%
Asia Dow
/quotes/zigman/6959860/realtime 2,703 -14 0.53%
Nikkei 225
/quotes/zigman/5986735/delayed 18,095 -70 0.39%
Hang Seng
/quotes/zigman/2622475/delayed 20,935 -250 1.18%
Shanghai
/quotes/zigman/1859015/delayed 3,160 -6 0.20%
Sensex
/quotes/zigman/1652085/delayed 25,454 -243 0.95%
Singapore
/quotes/zigman/1709939/delayed 2,878 -5 0.16%
Euro
/quotes/zigman/16008136/realtime/sampled 1.12 -0.01 0.63%
Yen
/quotes/zigman/16008150/realtime/sampled 120.10 +0.73 0.61%
Pound
/quotes/zigman/16008140/realtime/sampled 1.53 0.00 0.00%
Australia$
/quotes/zigman/16008115/realtime/sampled 0.70 +0.00 0.04%
DXY Index
/quotes/zigman/1652083/delayed 95.79 +0.41 0.43%
WSJ $ Idx
/quotes/zigman/41508961/realtime 88.54 +0.37 0.42%
U.S. 10yr
/quotes/zigman/15866666/realtime 2.17 +0.01 0.45%
German 10y
/quotes/zigman/15866409/realtime 0.78 -0.02 1.96%
Italy 10yr
/quotes/zigman/15866497/realtime 2.00 0.00 0.02%
Spain 10yr
/quotes/zigman/15866444/realtime 2.15 +0.01 0.45%
U.K. 10yr
/quotes/zigman/15866328/realtime 1.82 -0.01 0.55%
Japan 10yr
/quotes/zigman/15866525/realtime 0.39 +0.03 8.56%
Crude Oil
/quotes/zigman/2331095/delayed 44 -2 3.83%
Gold
/quotes/zigman/662444/delayed 1,135 -5 0.42%
Corn
/quotes/zigman/7599553/delayed 366 -3 0.88%
DJIA F
/quotes/zigman/38649152/delayed 16,173 +86 0.53%
S&P F
/quotes/zigman/30356461/delayed 1,923 +7 0.34%
Silver
/quotes/zigman/3134148/delayed 15 +0 0.24%

Quotes

Symbol Price Change % Change
FB /quotes/zigman/9962609/composite 88.38 1.15 1.32%
AAPL /quotes/zigman/68270/composite 110.03 2.31 2.14%
GOOG /quotes/zigman/30194416/composite 605.23 7.44 1.24%
BAC /quotes/zigman/190927/composite 15.66 0.13 0.84%
C /quotes/zigman/5065548/composite 51.19 0.25 0.48%
F /quotes/zigman/264304/composite 13.71 -0.01 -0.07%
T /quotes/zigman/398198/composite 32.65 0.33 1.02%
BP /quotes/zigman/247026/composite 31.86 -0.28 -0.87%
GE /quotes/zigman/227468/composite 24.18 0.30 1.24%
Visit the quote page and your most recently viewed stocks will automatically be displayed here.
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Rates »

5 yr CD
1.5%
2 yr CD
0.8%
1 yr CD
0.6%
MMA $10K+
0.3%
MMA $50K+
0.4%

National averages from Bankrate.com

You Don’t Need Another Credit Card, You Need A Better One.
Avg. APR Last Week 6 Months
Low Interest 11.62% 11.62% 11.53%
Business 12.85% 12.85% 12.85%
Student 13.14% 13.14% 13.14%
Balance Transfer 14.12% 14.12% 14.00%
Airline 15.10% 15.10% 15.15%
Reward 15.14% 15.14% 14.99%
Cash Back 15.27% 15.27% 15.26%
Instant Approval 18.00% 18.00% 17.93%
Bad Credit 22.73% 22.73% 22.48%
Source:CreditCards.com

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Trending Tickers
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Encore
A blog about living in and planning for retirement

As Market Tumbles, Time to Convert Traditional IRA to Roth?

iStockPhoto

There’s one way for people saving for retirement to use the market’s tumble as a force for good: Convert battered assets in your traditional individual retirement account to a Roth IRA.

Roths, you may recall, are retirement accounts in which you invest after-tax dollars and get tax-free withdrawals – and you don’t have to take them on a mandatory schedule, as you do with a traditional IRA. As of last year, there’s no income limit for moving money to a Roth from a traditional IRA or employer-sponsored retirement plan.

The catch is that you would owe income tax on the amount you convert for the year in which you do the conversion. And it’s generally best to use money outside your IRA to pay that tax. So, if you convert investments when they dip in value, you pay tax on a smaller amount – and have the potential for more tax-free growth in the future.

Converting to a Roth can also be a good estate-planning strategy. Although your heirs would have to take distributions from an inherited Roth each year, they don’t have to pay any tax on that income. And the money you use to pay the conversion tax, of course, is out of your future estate as well.

A few things to keep in mind: You can’t cherry-pick any after-tax contributions you’ve made to your traditional IRA over the years to convert. Instead, you get credit, proportionately, for after-tax money in your IRA. Here’s an example: You have $250,000 in IRA assets, including $200,000 in a rollover IRA from a 401(k) and $50,000 in another account, including $40,000 in after-tax contributions. That means 16% of a conversion would be tax-free.

Also, a conversion will raise your overall income, which could push you into a higher tax bracket.

Ed Slott, an IRA consultant in Rockville Centre, N.Y., suggests a good conversion strategy in a time of volatility: Put each different type of asset in a different Roth account. That way, if any asset class falls significantly in value, you can “recharacterize” that specific type of asset as a traditional IRA.

Keep in mind, though, that there’s waiting period after a recharacterization before you can convert again.

We wrote more about this strategy, along with other moves to take advantage of the downturn, in the Weekend Investor cover story.

What moves are you making with your retirement investments to capitalize on the carnage?

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 9)

View all Comments »
    • Converting a traditional IRA to a Roth IRA is an appealing option for individuals who believe their retirement income will be taxed at a higher rate than their current income. When you convert your traditional IRA to a Roth IRA, you have to pay tax on that money. Therefore, you must have enough savings outside your IRA to pay the tax on the converted amount. If you use the IRA assets to pay the tax, the benefit of converting to a Roth IRA may just about evaporate.
      http://www.nuviewira.com/

    • As everyone knows, any future Congress can start taxing Roth distributions, either directly or indirectly (e.g. by counting them in the income used to calculate Medicare B premiums). So you may have the experience of paying tax now when converting, and again when you take distributions. Any Roth is a gamble, and this is doubling the gambling.

    • with all the market turmoil, our combined Traditional IRA’s are down 3% since July 31 and 6% from the high on May 31. If we convert (we are in our mid-70′s) it will throw us into the next tax bracket and what will we have saved? We are staying with the Traditional IRA’s and taking the RMD’s as required. Yes, we pay tax on those RMD’s but so what? e look at the IRA’s as a money machine albeit that combined they only yield us about $17K taxable income which is useful for a vacation or a home improvement. The RMD’s are not part of our retirement planned income.

    • I think you might be wrong or a little vague on an important paragraph in this article. If you have a 401k w/both after-tax and before-tax contributions, the IRS has been vague (maddeningly so), but it appears that there is a defensible strategy to convert the after-tax into a Roth IRA and the pre-tax (and growth) into a traditional IRA and get the best of both worlds. If you look at Natalie Choate or Ed Slott, they both believe this is possible/defensible, with the caveat that the IRS has been slow to make public its take on this. There are several ways to accomplish this, but they seem to indicate that one in particular is the most defensible.

    • Good comments; Future obama tax increases is another reason.

About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.

MarketWatch - Stock Market Quotes, Business News, Financial News
Bulletin
Investor Alert

New York Markets Close in:

need to know
The 11 richest people on the planet under 35
Get last-minute, cheap Broadway tickets
Hulu rolls out ad-free option for $11.99 a month
Babe Ruth’s New York apartment is for sale
Vera Bradley soars on results, upbeat outlook

A customer server works in a Starbucks Coffee shop in Shanghai, China, on Thursday November 01, 2007Photographer: Kevin Lee/Bloomberg News. 
Inside the strongest S&P sector, the 10 best stocks
Dow pushes bid to halt latest multiday rout

Why gold now looks more risky than stocks
Why gold now looks more risky than stocks: Reeves

Still too many gold market bulls, says Hulbert

GoPro’s stock rocked by supplier’s outlook

Intel hopes its chip retool can revive PC sales

Private sector adds 190,000 jobs in August: ADP

U.S. productivity rises at fastest pace since end of 2013
Productivity rises at fastest pace since end of 2013

Donald Trump, Hillary Clinton playing game of liar’s poker with the voters
Trump, Clinton play game of liar’s poker: Delamaide
Bush mounts ‘germophobe’ attack on Trump

Workers don’t do better in unions
Opinion: Workers don’t do better in unions
Raising wages to $15 would raise prices by 4%
LA: $15 wage will lift 600,000 out of poverty

Growing doubts among Viacom investors lead to 50% stock drop
Growing doubts among Viacom investors

China stock market to close for World War II anniversary
China tightens controls to fight capital outflows

Guide to managing money from your 20s to your 70s
Guide to managing money from your 20s to your 70s
Take your company pension, or buy an annuity?
Don’t overcomplicate 401(k) transfer to an IRA
Is this all the investing advice you’ll ever need?

Never use a market order when stocks are selling off

Uber drivers lawsuit  endangers much more than Uber
Uber will likely appeal class action decision
Uber driver suit can proceed as class-action

McDonald’s set to offer all-day breakfast

No. 1 restaurant for ‘breakfastarians’ is ...
Teacher with 111 tardies blames breakfast

Where every Fed member stands on raising rates

Rate-hike question is what Yellen didn’t want
Boston Fed president: Sept. doubt remains

What to expect at September Apple event
What to expect from the Apple event on Sept. 9
New on the shelves of your Apple Store: drones
Apple talks to Hollywood for exclusive content
Lost Apple deal leads to 40% job cut at GT

These are the cars that get the most Instagram attention
Best time to buy a new car may be just ahead
U.S. car sales are stronger than expected

10 cities in U.S. with the very worst traffic problems
Lowest Labor Day gas prices in 11 years: AAA


/conga/frontpage.html 353953

Markets »

47.49MDow Volume:
Avg Vol: 111.86M
Unchanged
212
Decliners
2492
Advancers
3773
Price Chg %Chg 1 Day
Range: 1 Day
  • 1 Day
  • 5 Days
  • 1 Month
  • 3 Months
  • 6 Months
  • 1 Year
  • 2 Years
Dow
/quotes/zigman/627449/realtime 16,217 +159 0.99%
Nasdaq
/quotes/zigman/12633936/realtime 4,682 +46 0.99%
S&P 500
/quotes/zigman/3870025/realtime 1,929 +15 0.78%
GlobalDow
/quotes/zigman/629063/realtime 2,301 +6 0.27%
Gold
/quotes/zigman/662444/delayed 1,135 -5 0.42%
Oil
/quotes/zigman/2331095/delayed 43.67 -1.74 3.83%
FTSE 100
/quotes/zigman/3173262/delayed 6,083 +25 0.41%
DAX
/quotes/zigman/2380246/delayed 10,048 +32 0.32%
CAC 40
/quotes/zigman/3173214/delayed 4,555 +14 0.30%
FTSE MIB
/quotes/zigman/1482176/delayed 21,612 +161 0.75%
IBEX 35
/quotes/zigman/2759620/delayed 9,938 -55 0.55%
Stoxx 600
/quotes/zigman/2380150/delayed 354 +1 0.27%
Asia Dow
/quotes/zigman/6959860/realtime 2,703 -14 0.53%
Nikkei 225
/quotes/zigman/5986735/delayed 18,095 -70 0.39%
Hang Seng
/quotes/zigman/2622475/delayed 20,935 -250 1.18%
Shanghai
/quotes/zigman/1859015/delayed 3,160 -6 0.20%
Sensex
/quotes/zigman/1652085/delayed 25,454 -243 0.95%
Singapore
/quotes/zigman/1709939/delayed 2,878 -5 0.16%
Euro
/quotes/zigman/16008136/realtime/sampled 1.12 -0.01 0.62%
Yen
/quotes/zigman/16008150/realtime/sampled 120.11 +0.74 0.62%
Pound
/quotes/zigman/16008140/realtime/sampled 1.53 0.00 0.01%
Australia$
/quotes/zigman/16008115/realtime/sampled 0.70 +0.00 0.06%
DXY Index
/quotes/zigman/1652083/delayed 95.79 +0.41 0.43%
WSJ $ Idx
/quotes/zigman/41508961/realtime 88.54 +0.37 0.42%
U.S. 10yr
/quotes/zigman/15866666/realtime 2.17 +0.01 0.53%
German 10y
/quotes/zigman/15866409/realtime 0.78 -0.02 1.96%
Italy 10yr
/quotes/zigman/15866497/realtime 2.00 0.00 0.02%
Spain 10yr
/quotes/zigman/15866444/realtime 2.15 +0.01 0.45%
U.K. 10yr
/quotes/zigman/15866328/realtime 1.82 -0.01 0.55%
Japan 10yr
/quotes/zigman/15866525/realtime 0.39 +0.03 8.56%
Crude Oil
/quotes/zigman/2331095/delayed 44 -2 3.83%
Gold
/quotes/zigman/662444/delayed 1,135 -5 0.42%
Corn
/quotes/zigman/7599553/delayed 366 -3 0.81%
DJIA F
/quotes/zigman/38649152/delayed 16,173 +86 0.53%
S&P F
/quotes/zigman/30356461/delayed 1,922 +6 0.33%
Silver
/quotes/zigman/3134148/delayed 15 +0 0.24%

Quotes

Symbol Price Change % Change
FB /quotes/zigman/9962609/composite 88.42 1.19 1.36%
AAPL /quotes/zigman/68270/composite 110.02 2.30 2.14%
GOOG /quotes/zigman/30194416/composite 605.74 7.95 1.33%
BAC /quotes/zigman/190927/composite 15.66 0.13 0.80%
C /quotes/zigman/5065548/composite 51.19 0.25 0.49%
F /quotes/zigman/264304/composite 13.71 -0.01 -0.07%
T /quotes/zigman/398198/composite 32.60 0.28 0.87%
BP /quotes/zigman/247026/composite 31.86 -0.28 -0.87%
GE /quotes/zigman/227468/composite 24.20 0.32 1.33%
Visit the quote page and your most recently viewed stocks will automatically be displayed here.
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Rates »

5 yr CD
1.5%
2 yr CD
0.8%
1 yr CD
0.6%
MMA $10K+
0.3%
MMA $50K+
0.4%

National averages from Bankrate.com

You Don’t Need Another Credit Card, You Need A Better One.
Avg. APR Last Week 6 Months
Low Interest 11.62% 11.62% 11.53%
Business 12.85% 12.85% 12.85%
Student 13.14% 13.14% 13.14%
Balance Transfer 14.12% 14.12% 14.00%
Airline 15.10% 15.10% 15.15%
Reward 15.14% 15.14% 14.99%
Cash Back 15.27% 15.27% 15.26%
Instant Approval 18.00% 18.00% 17.93%
Bad Credit 22.73% 22.73% 22.48%
Source:CreditCards.com

SPONSORED SECTIONS

Trending Tickers
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  • /quotes/zigman/55297/composite INCY+2.57%
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