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Convert IRA into ROTH IRA?
I have roughly 4k in a 401k from a previous employer that I'm thinking about rolling over into a ROTH IRA through ING. I believe this means I have to pay taxes on that 4k (since it came out of my paycheck pre-tax) but I think it makes more sense to do this since A.) I expect my tax bracket to be higher in retirement and B.) Since I'm young, it makes more sense to not get taxed when I pull this money out after it has matured, than to save a few beans and not have to pay taxes on 4k.
Am I correct in this line of thinking? Also, at what rate will I be taxed on the 4k, and is this something that I need to pay immediately, or is my income just considered 4k higher for the year? Many thanks in advance. |
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