How This Family Moved To The “Hood” and Paid Off $120,000 in Debt - Recently, I decided to start a new series where I interview people who are doing extraordinary things with their lives. First up was JP Livingston, who r...
Friday, May 14, 2010
You can't time the markets
That's the old adage anyway. Despite that being drilled into my brain for years and years, I'm finding myself wondering whenever there is a sharp drop if that day might be one of the lowest points of 2010. Why?
Because I've decided to convert part of my traditional IRA into a Roth in 2010. Why? It has nothing to do with the income limit being lifted...our income has never been high enough to disqualify us from making a Roth conversion. It has nothing to do with being able to spread the tax over the next 2 years. I'm quite fine with paying the tax in 2010, since I don't anticipate tax rates being lower in 2011 and 2012.
But, we have set aside $5,000 for energy-efficient improvements (namely windows) to put in place in 2010. These improvements will qualify for a 30% tax credit. So I've decided to convert the amount of my traditional IRA into a Roth that would translate into a $1,500 tax bill. I won't be out of pocket anything, but I will get that IRA money into my preferred retirement vehicle.
Of course, I'd love to make the conversion on the absolutely lowest day for the stock market. That would mean more shares get thrown over to the Roth with full anticipation that the value will rise over time. So when is that day???