In 1997, the Roth IRA was introduced. This new IRA allowed for contributions to be made on an after-tax basis and all gains (or growth) to be distributed completely tax-free. Since then, people with incomes under $100,000 have had the option to convert all or a portion of their existing Traditional IRAs to Roth IRAs. Beginning in 2008, participants with funds in eligible employer-sponsored plans could also roll those funds directly over to a Roth IRA in a qualified rollover if their income did not exceed the $100,000 threshold. Starting in 2010, all IRA owners and participants in eligible employer-sponsored plans, regardless of income level, are eligible to convert their Traditional IRA and pre-tax funds in an employer-sponsored plan [401(a)/(k), 403(b) and governmental 457(b)] to a Roth IRA. Is this a good option for you? A conversion has both advantages and disadvantages that should be carefully considered before you make a decision. This calculator compares two alternatives with equal out of pocket costs to estimate the change in total net-worth, at retirement, if you convert your Traditional IRA into a Roth IRA.
This information is provided by American General Life Insurance Company (AGL) and The United States Life Insurance Company in the City of New York (US Life), members of American International Group, Inc. (AIG).
Interactive calculators are made available as self-help tools for independent use and are not intended to provide investment or tax advice, either express or implied. AGL and US Life cannot and do not guarantee their applicability or accuracy. All results are hypothetical representations for illustrative purposes only. Questions regarding this information should be discussed with your attorney, tax advisor or accountant.
To ensure compliance with requirements imposed by U.S. Treasury Regulations, we inform you that any tax advice contained in this document (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.