Roth Conversion Resource Center

All traditional IRA account owners regardless of age, including those with SEP¹ and SIMPLE IRA² accounts, have the option to convert their IRA and have it become a Roth IRA. Prior to 2010, individuals and couples had to have Adjusted Gross Income below $100,000 to convert their traditional IRAs to a Roth.

Converting means that all or a portion of an individual's IRA becomes taxable and the account is reclassified as a Roth IRA. If the account is held until age 59 ½ and as least five years, all the Roth IRA proceeds, including the earnings, will be income tax free.

This information is being provided as general information and is not intended to be legal or tax advice. Lord Abbett does not provide legal or tax advice.

Consider a Roth conversion if:

You would like to have the opportunity to have tax-free retirement income
You believe future tax rates will be greater than today’s
The taxes due can be paid without using converted IRA assets as a 10% penalty may apply
You could benefit from many years or tax deferral
There is a desire to leave a tax free legacy to a spouse or non-spouse beneficiary

Resources
Roth Conversion FAQs Take an in-depth review of the in's and out's of the opportunity to convert to a Roth IRA.		Roth Conversion Opportunity Flyer Learn about the major consideration points when converting to a Roth IRA.

¹ A Simplified Employee Pension Plan, commonly known as a SEP-IRA, is a retirement plan specifically designed for self-employed people and small business owners. When establishing a SEP-IRA plan for your business, you and any eligible employees establish your own separate SEP-IRA; employer contributions are then made into each eligible employee's SEP-IRA.

² A SIMPLE IRA plan is an IRA-based plan that gives small business employers a simplified method to make contributions toward their employees' retirement and their own retirement. Under a SIMPLE IRA plan, employees may choose to make salary reduction contributions and the employer makes matching or non-elective contributions. All contributions are made directly to an Individual Retirement Account (IRA) set up for each employee (a SIMPLE IRA). SIMPLE IRA plans are maintained on a calendar-year basis.