Ready for 2010 yet?
Or more specifically, are you prepared for tax law changes that take effect in 2010? I'm starting to see plenty of evidence that financial planners are chomping at the bit to start working on Roth conversions, thanks to a revision in the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA).
In 2010, the existing $100,000 modified adjusted gross income limit on the conversion of traditional IRAs to Roth IRAs will be eliminated. This means that no matter how much money a client makes in 2010, that client can utilize a Roth conversion to reposition money in the account from always being taxed to being forever tax-free. And in 2010 only, clients may elect to soften the immediate tax blow by spreading the taxes incurred by the conversion over two years.
Clients looking to retire in the next 10 or so years will likely do so in a much higher tax environment, thanks in large part to whatever version of a health care reform bill that ends up passing, a "needs fixing" Social Security system and a near $12 trillion national debt. There just seems to be no way around significant tax increases for most taxpayers, and even higher increases for top earners like those soon to be eligible for Roth conversions. Often, these high earners are not relying on these IRA funds for their own retirement income, but are simply looking to pass on as much tax-free money to their heirs as possible. Roth IRAs are a great estate planning tool to accomplish that goal.
Surveys indicate that a majority of traditional IRA holders currently have no plans to convert them. In some situations it won't make sense to the client to do a conversion. But there are many good candidates out there who are unaware of the benefits of a conversion, or are unaware of the tax law changes scheduled to take effect in 2010.
Higher taxes in the future certainly makes Roth Conversions look particularly attractive right now. I'm sure Ed Slott and his team of "elite IRA advisors" can hardly contain themselves.
Have you checked out our Web site lately? Our traffic has risen significantly since we overhauled the old site in June, but I suspect a large number of Life Insurance Selling subscribers still haven't found their way to the new site (www.lifesinsuranceselling.com), and therefore don't know all the new tools and features we have added.
Sure, you can still check out the latest issue of the magazine and find articles from every issue posted on the site, but now we also update the site daily with news feeds in the "Today's Features" section of the home page. You'll find the latest updates from our partners at National Underwriter Life & Health, plus select Web-exclusive features from ProducersWEB. We also aggregate news items and insurance-related videos of interest from a variety of outside sources, including YouTube. Sometimes they're funny, sometimes they're serious, but they are always of interest to our community of producers.
You will also find plenty of industry-specific sales and marketing tips among the Web-exclusive features on the home page, plus you can check out my Editor's Blog. If you haven't visited the site lately, please check it out.
