Financial Issues with Dan Celia
Financial Issues with Dan Celia
Dan Celia
Dan Celia
Financial Issues

November 2017 – Q: Three years from retirement, we're trying to determine whether we should go from our Traditional IRA to a Roth IRA.

A: A Roth IRA is a great vehicle for saving taxes. All that you save and invest grows tax-free. When you remove some of the money for income, you will not have to pay tax on any of it.

However, if you were changing to a Roth from a Traditional, you need to be aware of a few things. If you expect to begin using the money within the next 5 to 10 years, there may not be an advantage. Remember that when you change to a Roth, all of the taxes are due immediately on that money. It would take years of tax-free growth to make up for the money that you’ve already paid in taxes.

A better alternative may be to gradually, little by little, draw some of the money out of the Traditional IRA and move it into a Roth while you are still working. In this way, the tax burden will not be as bad.

Finally, a Roth can have a long-term positive impact because you will never be required to take any money out. Furthermore, your heirs will never have to pay taxes on the inheritance.


Dan Celia has been in financial management for more than 30 years. He works closely with AFA Foundation and can be heard six days a week on AFR Talk (

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