The Roth Revolution

James Lange, CPA has 30 years experience as a CPA/Attorney specializing in retirement and estate planning. He wrote the very first peer-reviewed article on Roth IRA conversions in 1998, and since then has published two editions of the best seller, "Retire Secure!" and has been quoted 30 times in The Wall Street Journal.

What’s New
    New Tax Law #1
    New Tax Law # 2
    New Tax Law # 3
    New Tax Law #4
    New Tax Law #5
    Oldies but Goodies, Classic Concepts Regarding Roth IRA Conversions
Special Notes to the Reader Regarding Several Technical Issues
    The Use of the Phrase “Measured in Purchasing Power”
    Journalistic Accuracy Comment
    Investment Rate
Topics that are Not Covered in The Roth Revolution
    Roth IRA Conversions and Non-traditional Investments
    Planning for Long-Term Care
Chapter One    : Roth IRA Conversions and the Dream of Tax-Free Income for Generations
    A Quick Review of Traditional Tax Planning
    The Roth IRA Conversion Rationale
    The Secret--Measuring Wealth Using Purchasing Power Instead of Total Dollars
    The Simple Math (Arithmetic) Behind the Secret
Chapter Two: Measuring the Benefits of a Roth IRA Conversion
    Measuring the Benefits of Your Roth IRA Conversion for your Children and Grandchildren    Why You Will Likely Die with a Roth IRA
    The Unique Features of an Inherited Roth IRA
    What Happens if You Die and Leave Your Roth IRA to the Next Generation?
Chapter Three: Measuring the Benefits of Roth IRA Conversions in Light Of Two New Tax Increases    Children of High Income IRA Owners
    The Benefits of Roth IRA Conversions to the Third Generation of High-Income Taxpayers    Are these Pie in the Sky Projections of the True Value of a Roth IRA Conversion to Your Family?    Summary of New Effective Tax Rates Comparing 2010 with 2011 Rates and 2013 when Health Care Reform Takes Effect
    The Benefits of a One-Million-Dollar Conversion
    The Next Generation of a High Income Tax Bracket Family Converting $1M    The Benefits to the Grandchildren of Mr. Roth IRAs $1M Conversion
    The Reduced Estate and Inheritance Taxes Associated with a Roth IRA Conversion
Chapter Four: A Deathbed Roth IRA Conversion Story
Chapter Five    : My Roth IRA Conversion Story: How I Got Started with Roth IRA Conversions    My Roth IRA Conversion Story
    A Roth IRA Conversion Douses the Impact of a Devastating Fire
    Subsequent Events    
Chapter Six: The Three Buckets of Money Story
Chapter Seven: Typical Roth IRA Conversion Advice: It Is Not Usually Advantageous to Convert the Entire IRA    2010 Tax Rates for Married Filing Jointly
    What Happens if Your (or Your Heirs’) Tax Rate Will Change?
    A Surprising Pattern of Over-Converting if You are Over 70
    The General Concern about Raising Tax Rates
    What About Changes in the Tax Law that Could Make a Roth IRA Conversion Disadvantageous?
    What if You Don’t Have the Money to Pay the Tax on the Conversion from Outside the IRA?    Illustration of the Extreme Situation when there is No Money to Pay the Tax on the Conversion
Chapter Eight: How Much and When You Should Convert to a Roth IRA
    Roth IRA Conversion Software
    How to Calculate How Much Money You Should Convert to a Roth IRA Using a Comprehensive Analysis    What Assets Are You Allowed to Convert to an IRA?
    Story--Kevin & Debbie Smith: Married Couple in Mid-60s
    Biography
    Analysis, Discussion and Recommendation
    Gifting Recommendations
    Estate-Planning Documents
    In the Final Analysis...
Chapter Nine: Converting Non-deductible IRAs and After-Tax Dollars in Retirement Plans without Having to Pay Any Taxes    Converting Non-deductible IRAs to Roth IRAs
    After-Tax Dollars inside Your Retirement Plan
    After-Tax Dollars Inside Your IRA    
    How to Qualify to Make a Tax-Free Roth IRA Conversion If You Have Both After-Tax and Pre-Tax in Your IRA    For Readers Who Are Still Working and Also Have a Non-deductible IRA
    What If You Are Retired?
    Roth IRA Conversions of After-Tax Dollars in Your Retirement Plan if You Are Still Working    Active Employees Making Ongoing IRA and Retirement Plan Contributions    The Reporting and Accounting of After-Tax Dollars Inside Your IRA and Retirement Plan
Chapter Ten: An Aggressive Strategy--The Roth Launcher--Recharacterizing or Undoing a Roth IRA Conversion    The Problem This Strategy Solves
    Hedge Your Bets
    Do You Really Have to Segregate Your Roth IRA Accounts?--Yes!
    An Example of the Wrong Way to Do It
    Rules Governing Recharacterizations
    Procedure for Re-characterizing a Converted Roth IRA Back to a Traditional IRA    Multiple Roth Conversions and Recharacterizations
    The Amount Recharacterized Differs from the Conversion Amount
    Case Study: Roth IRA Conversion Made in Year
    Pitfalls of Option 4
    Time Line for Converting to a Roth IRA and Then Recharacterizing Back to a Traditional IRA    Year One
    Year Two
    The November Shuffle--The Really Advanced Convert and Recharacterize Strategy
    The Mechanics of Filing Your Tax Return with this Horse Bet Strategy
    Combining Strategies into One Great Roth Launcher Process
    Warning! Warning! Warning! and Disclaimer
    The Epiphany of the Aggressive Strategy with Steve’s “Roth Launcher” Process    The Middle Road
Chapter Eleven: The Potential Pitfalls of a Roth IRA Conversion
    Don’t Get Me Wrong and Let This Chapter Dissuade You
    Investment Risk
    Potential Changes in the Tax Law
    Risk of the Elimination of the Income Tax
    Risk of Lower Tax Rates In the Future
    Charitable Beneficiaries
    The Risk (or Certainty) of Additional Complication and Paperwork
    Story--Vincent & Edith Butler: Sometimes a Roth IRA Conversion Doesn’t Pay    Biography
    Analysis, Discussion and Recommendation
Chapter Twelve: The Synergistic Strategies of Roth IRA Conversions and Delaying or Even Returning Your Social Security    Delaying Social Security and Roth IRA Conversions
    Giving Your Social Security Benefits Back
Chapter Thirteen: Specific Advice to Taxpayers in Different Tax Brackets
    Zero Percent Tax Bracket
    The Ten Percent Bracket
    The Fifteen Percent Bracket
    The Twenty-Five and Twenty Eight Percent Tax Bracket Readers
    The Thirty-Three Percent Tax Bracket Readers    
    People in the Top Tax Brackets Who are Likely to Remain There
Chapter Fourteen: Times When You Should Spend Your Roth IRA
    Roth IRA Useful for Large Single Year Spending Needs
    Roth IRA Useful for Smaller Multi-Year Spending Needs
Chapter Fifteen: Roth IRA Conversions and Charitable Beneficiaries
    Non-Proportional Beneficiary Designations Adds Value for Heirs and Charities    A Common Mistake
    Legacy Impact of Combining Charitable Gifts with Roth IRA Conversions
    Life Insurance with Charitable Bequests and Roth Conversions
    Story--Sarah Wilson: Charitably Inclined Reader
    Biography
    Analysis, Discussion and Recommendation
    The Most Cost Effective Method of Providing for Charity for Senior IRA Owners    You Can Deduct a Greater Amount of Large Charitable Gifts by Using your IRA to Help Fund the Gifts    Consider Supersizing Your IRA Charitable Gift by Using it to Fund a Life Insurance Policy for Your Charity    If You Have After-Tax Dollars in Your IRA, Making IRA Gifts Now Will Make Roth IRA Conversions More Attractive in the Future
    Reducing Your AGI through Using your IRA to Make Charitable Gifts Can Have Many Additional Tax Benefits for You
Chapter Sixteen: Roth IRAs, Roth 401(k)s and Roth 403(b)s in the Accumulation Years    You Are On Your Own Because Big Brother Can’t Spare a Dime
    Basic Roth IRA Information    
    Roth IRA Eligibility Rules
    Traditional IRAs
    Roth IRA vs. Traditional IRA
    Total Spending Power of Savings Methods
    Roth 401(k) Plans and Roth 403(b) plans and the New Contribution Limits    What Are These Roth 401(k) and Roth 403(b) Plans?
    Special Note for Teachers and Other Municipal Workers
    Roth 401(k) vs. Traditional 401(k)
Chapter Seventeen: Estate Planning for Roth IRA Owners
    Which Assets Should You Spend First?
    What Happens to a Traditional IRA if You Leave it to Your Spouse?
    What Happens if You Leave Your Roth IRA to Your Spouse?
    What Happens After an IRA Owner Dies and Leaves the IRA to a Non-Spousal Beneficiary?    Why Dying with a Traditional IRA is not So Bad
    What if Your Child is a Spendthrift?
    What Happens if You Leave Your Roth IRA to a “Non-Spouse” Beneficiary?    Naming Young Children as Beneficiaries of IRAs and Roth IRAs
    The Best Estate Plan for Traditional Married Couples with IRAs and Roth IRAs    Estate Taxes    
    The Cruelest Trap of All
    The Best Estate-Planning Solution for Traditional Couples
    A Cascading Beneficiary Story
    A Cascading Beneficiary Story with a Twist
    Second-To-Die Policies for IRA Owners
    Variations on Lange’s Cascading Beneficiary Plan
Chapter Eighteen: Roth Conversions Now Possible In 401(k) and 403(b) Plans
    The Killer Strategy That Could Make a Tremendous Difference in Many Lives
Chapter Nineteen: Combining Different Strategies
    The Combining Different Strategies Story
    Paul and Carol’s Family
    Paul and Carol’s Financial Situation
    Legal Recommendations for Combining Retirement Strategies
    Retirement Plan Strategies
    Life Insurance Recommendation
    Other Gifting Recommendations
    Summary of Savings from Recommendations
Appendix
Additional Resources and Reading
About the Author
The Next Step
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