Replies to post #196938 on Wave Systems Corp. (fka WAVXQ)

[Flyerguy]

Hi, Toro...thanks for the info..Just curious, since you are familiar with the expense of converting an IRA to a Roth IRa...what would the cost be these days ..say on a $100,000. acct.?? TIA.. Flyer'

[may1sep2]

toro, Thanks for the info but I
have no knowledge on Roth. What
I learned about IRAs was the
hard way. May1

[knute97]

Toro,

I am 69 1/2 and have been contemplating turning over an IRA into a Roth.

While it's true that you are taxed in 2010 and 2011 as ordinary income on the converted amount, my understanding is that you can remove principal immediately without penalty provided you are over retirement age. Only earnings on the principal would have to be held for the 5 year period and would accrue tax free.

The following is the response that I receive from TDAmeritrade regarding this issue:

"Since you are over the age of 59.5 you may withdraw the total converted principal at any time. There is no holding period on the funds. Once you see the assets post to your Roth IRA you may request a distribution for any amount available in cash."

Consequently, what's to prevent you from converting today and immediately removing all the converted principal and delay paying taxes until 2011 and 2012?

Would like to hear from the board on this.

K97

[Snackman]

Toro I recharacterized two years in a row before the final time I converted.

I sold my stock at $.53 and bought it back in my Roth at $ .50. Over 60% of my holdings are now in my Roth. My five year waiting period is up next June.