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: This month we're focusing on upcoming tax law changes that make converting IRA's to Roth IRA's more attractive and more accessible in 2010. We also continue to be busy at our new office, so make sure to read all sections of the newsletter. You can also keep up-to-date on all of our upcoming changes by becoming a "friend" on our Facebook page or by following us on Twitter. |
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Roth IRA's in 2010
In 2010, converting your traditional IRA to a Roth IRA will become more attractive and more accessible than ever since the Roth IRA's inception in the late 90's.
Current regulations prevent individuals and couples earning more than $100,000 from converting their IRA to a Roth. For those who are eligible, taxes on the full transfer must be paid at the conclusion of that tax year.
Next year, regardless of income, any individual will be permitted to convert their IRA to a Roth IRA. This is generating a lot of interest with higher income clients because they typically have little to no money saved in a Roth IRA. By converting, they will be able to shift the taxable income generated by a traditional IRA to potentially tax-free income generated from a Roth IRA. By having funds in both types of IRA's, clients can better control their income taxes during retirement, avoid taking a distribution at age 70 1/2 from their Roth IRA's, and transfer assets tax-free to their heirs.
The good news for everyone who wants to convert in 2010 is that taxes will be spread out with half being due in 2011 and 2012.
Remember though, just because you can, doesn't mean you should. There will still be a five-year waiting period and you must be at least age 59 1/2 before you can withdraw funds from your account without a penalty. Also, you may have to wait a few years (or more) before the cost to convert has been made up by gains in your Roth.
Make sure to review all options with your CPA and financial advisor before making any changes.
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Office News 
We recently added two new states to our list of states where we can work with new clients. If someone you know lives in Nevada or Texas and would like to speak with a financial advisor, please forward this newsletter and our contact info. We'll be happy to speak with anyone you refer to us.
You may have recently received a survey from us. We're going to provide educational presentations both in house and via the web to clients, their friends, and to the public. Please make sure to reply so we know which topics generate the most interest.
This month, we'll have a booth a BARCStoberfest in Patterson Park. The event will be held on Sunday, October 25th. Make sure to attend the event to help support the city's animal shelter. Stop by our booth and say hello while you're there.
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On the Home Front 
On November 12th Roxy will turn 2! It's hard to believe that we've had her so long. Heidi and I both hope that with age will come more patience and less energy. However, we're not going to hold our breath.
Midway through the season, Heidi's kickball team already has more wins then they did in the Spring. Hopefully they'll continue their progress in the Fall and into the playoffs!
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I hope you enjoyed this month's newsletter.
Best Wishes,
Woody Derricks
President
Phone: 410-732-2633
Toll Free: 877-807-2633
Fax: 410-732-2634
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Please note our new mailing address:
1819 Thames Street
Baltimore, MD 21231
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Available by Appointment in Alexandria & DC.
Woody Derricks is also registered to discuss and transact securities business in:
AK, CA, CT, DC, DE, FL, MD, NJ, NY, NV, PA, RI, TX, VA, and VT. |
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