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Roth IRA Conversion: A Smart Move Right Now?

Retirement planning can be complicated, especially with all the complex rules governing tax-favored retirement accounts. But it can be well worth the effort to take advantage of smart planning opportunities in order to make the most of your retirement savings. One strategy to consider involves converting existing retirement accounts to a Roth IRA.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at Roth IRA conversions. Dan notes that even though you pay tax on the converted amount, you don't have to pay tax on future income and growth within the Roth IRA. If you're in a low tax bracket now, converting often makes sense. But Dan notes that it also makes a difference what investments you own, as the ideal time to convert is when asset prices are low in order to minimize your immediate tax liability. Dan notes that for investors in SPDR Gold (NYSEMKT: GLD  ) and MarketVectors Gold Miners  (NYSEMKT: GDX  ) or mining stocks Newmont Mining (NYSE: NEM  ) and Goldcorp (NYSE: GG  ) , current low levels might make now a great time to convert an IRA that owns those stocks.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 11, 2014, at 11:53 PM, angelwithwings wrote:

    Tax wise, It would have been smarter to do the Roth IRA conversion in March 2009 at the market minimum. But, hindsight is 20:20.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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