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Old 01-09-2017, 09:42 AM
 
7,801 posts, read 4,391,333 times
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I was under the impression that I had initially opened a traditional IRA for one year ($6k investment) before realizing that a Roth would be more advantageous (non-taxed) and, I THOUGHT, started contributing to that. Now, five years and five maximum contributions later, I find that what I have is a $6k Roth 60-month certificate (?) and four years' worth of annual $6k contributions to a traditional IRA account. Don't even ask me how that happened, as I thought I made myself clear, but I admit this was done over the phone to my bank and signed electronically (I probably just assumed that I was signing the correct document). At any rate... What to do now? Contribution time again, so I assume I should now -- later rather than sooner -- open that Roth. Confirm or deny?
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Old 01-09-2017, 09:50 AM
 
Location: Columbia SC
8,974 posts, read 7,745,489 times
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My personal belief is to take the tax deduction and face paying taxes at a later time which says a traditional IRA, not a Roth. That is what I did and at age 74, I am now taking the MRD and paying taxes. I look at it as if I had that extra money accumulating wealth for me and I will gladly pay the taxes.

YMMV
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Old 01-09-2017, 09:55 AM
 
7,801 posts, read 4,391,333 times
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Suze Ormon always pushed the Roth, so I'm SURE that's what I requested (once I'd learned about that). I wonder why she did so?
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Old 01-09-2017, 10:14 AM
 
Location: SoCal
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Was it non deductible IRA?
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Old 01-09-2017, 10:15 AM
 
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Just says "Traditional IRA Account." I rely on the so-called experts to know the details!
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Old 01-09-2017, 10:16 AM
 
Location: SoCal
13,235 posts, read 6,335,450 times
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Check your tax returns, did you have to file form 8606 every year?
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Old 01-09-2017, 10:17 AM
 
7,801 posts, read 4,391,333 times
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No.
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Old 01-09-2017, 10:24 AM
 
Location: SoCal
13,235 posts, read 6,335,450 times
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Did you take deduction as in did it reduce your tax because of the IRAs? If yes then you need to take the whole disbursement and pay the tax up front when you converting.
If no, then file the proper paperwork, so you only have to pay the earnings. It's best to check your tax returns.
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Old 01-09-2017, 01:19 PM
 
Location: Phoenix, AZ > Raleigh, NC
15,076 posts, read 19,019,086 times
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You need a CPA to help with this.

The first determination is whether your current contributions should be put into a Roth or a traditional IRA. That is dependent on several factors, including your age, tax bracket, retirement goals and other potential retirement income.

The second determination is whether or not you should convert your current traditional IRA to a Roth. That is dependent on many of the same factors as listed above, plus one more: do you have the cash to pay the additional taxes that will be due from the conversion. You should note that the conversion can be completed over several years, and you are not required to convert 100% of the account. Partial conversions are allowed.

The third determination is what these accounts should be invested in. This is dependent on your age, risk tolerance, retirement goals and other potential retirement income. Sadly, it's also a decision that is made by choosing the wrong investment advisor. It sounds like your current IRA has been invested in a 60 month CD (you used the term "60 month certificate"). Of I'm correct, you've already received terrible investment advice (unless MAYBE your 80 years old and have no other funds and have zero risk toletance).

You need a CPA or a FEE ONLY CFP to help you. Educating yourself by doing some reading is also required. And start reading documents BEFORE you sign them.

PS - if you don't already have beneficiary assignments on those IRA accounts, get that done NOW. Inherited IRA's can provide significant tax savings if the beneficiaries are assigned instead of it just going into an estate. Your will CANNOT do this for you! The CFP or CPA can help advis you.
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Old 01-09-2017, 02:04 PM
 
Location: Seattle
6,486 posts, read 14,184,834 times
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Quote:
You need a CPA or a FEE ONLY CFP to help you.
This. Find a fee only CFP and go from there. It'll be worth the investment.
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