SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Dividend investing for retirement
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Labrador who wrote (5883)9/21/2010 3:08:46 PM
From: geoffrey Wren2 Recommendations  Read Replies (1) of 34328
 
There are so many variables to a conversion.

The VAT is certainly one. One can imagine a future where income tax rates are lower, and a VAT tax is in place. So then you wonder: Why did I convert?

There are some ways that ROTH are better: No forced withdrawals, and better treatment in estate tax calculation. Also if you have a portion of your IRAs in ROTH, you can do some timing on recognition of income to try to avoid top tax rates.

If there are people out there unemployed and not paying taxes, they out to convert at least a little if they can do it for free.

One way a conversion is certainly questionable is if you are in a high tax state like California and plan to retire in a low tax state or no tax state like Nevada. You have to compare the combined taxes now in conversion to the federal only taxation in retirement.

I doubt very much that a VAT will be implemented anytime soon. It is good tax policy, but it will not be implemented. To get it implemented, promises will be made to reduce other taxes, but there will be extreme skepticism that the other taxes will stay reduced, and therefore the VAT will not make it. That is one person's opinion only, of course.

I know a fairly sophisticated investor who does not believe in conversions. He thinks one should always avoid taxes this year. Always. He might allow for a two year calculation, but not for one that depends on estimates of taxation way into the future. Who knows what the future will bring.

I have converted about 1/3rd of my IRAs, and may convert a little more. It is a judgment call.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News