• Roth IRA/401(k) Conversion Opportunity: Acting in 2010 May Be Optimal
  • November 2, 2010 | Authors: Robert C. Fleder; Alan S. Halperin; David R. Sicular
  • Law Firm: Paul, Weiss, Rifkind, Wharton & Garrison LLP - New York Office
  • As you may know, starting in 2010, all taxpayers can convert their regular individual retirement accounts (IRAs) into Roth IRAs. (Before 2010, only lower-income taxpayers could convert.) Legislation enacted on September 27, 2010 will allow some accounts in an employer-sponsored 401(k) plan to be converted to Roth accounts, even if the account holder is still working. The new legislation is subject to a number of limitations and uncertainties, and can facilitate conversion only if the 401(k) plan is appropriately amended. There is more detail about the new law at the end of this memorandum.