AboutBruce Julien Expertise I can answer questions on and raise issues clients overlook in the areas of Estate Planning as far as taxes and distribution flow problems, Asset Management as far as appropriateness of assets and allocations for a desired goal and the value a consumer gets for their costs, Tax Planning related to Income and Estates, and Insurance/Annuity questions particularly in light of suitability to the consumer.
Experience I became a CPA in 1991 and began offering financial advice in 1992. I am a Registered Investment Advisor which means I sign off on putting clients' interests first in a fiduciary role.
Education/Credentials BA in Accounting, University of Maryland 1990
Question We are retired-77 yrs old- income under $100,000 but above $50,000. Draw Soc. Sec. Pension, RMD income from IRA once a year. Several Municipal investments. We received our bank newletter that advised investing in a Roth IRA with our last annual RMD payment which is about $5,000.
I deferred payment on the 09 RMD. But we do have some other monies we could put in a Roth IRA. Say maybe 5-10,000. (and your spam letters are really tough to read. not clear at all)
I don't understand IRA's other than you pay tax first on Roth and after on Traditional. IS THIS GOOD ADVICE OR NOT? We can draw around 5% on Municipal Bonds. Any advice appreciated. Thankyou
Answer Charles I don't know what you meant by " (and your spam letters are really tough to read. not clear at all) ". I don't have anything to do with your bank if that was the reference and we haven't communicated in the past.
Anyway without earned income (salary, self employment etc) you can't add money to a Roth. You can convert regular IRA's to Roths by paying the tax when you convert. In 2010 they will allow you to do that regardless of a high income, and allow you to spread the tax over two years. The distributions specifically can not be dumped back into a Roth.
In your case, which you must thoroughly explore, I would suspect it isn't worth converting since you would give up a lot of money now and possibly not have enough time left to make it back. Also you say you are living on a RMD each year so if you continue to withdraw, you are reducing the pile of this great account quickly.
See a local CPA or Fee Only Financial Planner. Good luck
