Traditional IRAs, (whether invested in CDs, stocks and bonds or mutual funds) involve PRE-TAX savings that are taxed upon withdrawl. Roth IRAs do not have the pre-tax benefit, however the account will not be taxed when the money is taken at retirement.

1.) If you think you might be in a higher tax bracket in retirment - maybe because you have such a good pile of income and the house is paid off - consider a conversion.

2.) There is no fee to convert a Traditional IRA to a Roth. However, the converted amount may be taxable in the year the conversation is made.

3.) Unlike a Traditional IRA, and other pre-tax vehicles, there is no age at which one MUST take withdrawls at age 70.5 You may leave your money in a Roth for as long as you would like to and do have to worry about Required Minimum Distributions. I know that for me, having the flexibilty to defer withdralws is a comfort.

4.) Do speak to your tax advisor as those with incomes above certain levels are not eligible for Roth conversions. Income limits are set to expire in 2010. But that may change with a new administration.

Marion R. Syversen, MBA - President

NorumbegaFinancial

207.862.2952

Marion@NorumbegaFinancial.com <mailto:Marion@NorumbegaFinancial.com>

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