Is The ROTH IRA right for you?

DO YOU QUALIFY?

Adjusted gross income must be less than $100,000 regardless of filing status
Married filing single ineligible unless spouses have lived apart entire year
Adjusted gross income does NOT include IRA distribution

BENEFITS OF CONVERSION

Account is never subject to income tax
Do not need to take mandatory distributions at age 70-1/2
Can withdraw funds penalty-free even if under age 59-1/2 after five years
Can withdraw earnings tax-free after five years and over age 59-1/2

FACTORS TO BE CONSIDERED

Your current tax bracket vs. projected tax bracket at retirement
Number of years until retirement
Source of cash to pay the tax
Estate tax considerations

FOUR YEAR SPREAD

1998 conversions can be spread over four years
Total contribution may be reported on 1998 tax return

ABILITY TO "UNDO" A ROTH CONVERSION

You can transfer back to a regular IRA anytime before the extended return due date

CURRENT YEAR CONTRIBUTION REQUIREMENTS

Must have earned income
Eligibility phases out if AGI exceeds $95,000 for singles and $150,000 for married
There is a $2000 annual contribution limit
Can withdraw contributions at any time without taxes or penalties
Contributions can be made after age 70-1/2

The ROTH has greater liquidity and broader access than a regular IRA but it is complex. We suggest you consult with your CPA or other tax professional.