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To Convert or Not to Convert, That is the Question |
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 Exploring the ROTH Conversion Opportunity
By Ted Stanley, Advancial Investment Services
Although 2010 brought about many changes, none may be as important to retirees (pre or post) as the opportunity to convert Traditional IRA accounts to Roth IRA accounts. There may be great tax advantages to consider when thinking of converting your Traditional IRA to a ROTH IRA.
As a provision of the Tax Increase Prevention and Reconciliation Act of 2005, the income limitations for converting to a ROTH IRA have been eliminated in 2010. The once-imposed limit for those making over $100,000 in annual income is eliminated and anyone wishing to convert in 2010 can consider doing so regardless of income levels.
There are many reasons to consider the conversation of Traditional IRA or retirement accounts to a ROTH IRA account. The most glaring is possible tax-free income in retirement years. Withdrawals taken from a ROTH accounts generally come out free of income tax.
•Split the Tax Liability over two years. Converting Traditional IRAs to Roth IRAs can be a taxable event and can create tax liabilities. However, taxable income created as a result of the conversion in 2010, can be divided in half and taken in 2011 and 2012. The account holder should have other funds (non-qualified) to pay these taxes. The conversion may not be beneficial if the account owner has to pay penalties for early withdrawals (those under 59 ½) and taxes on the funds withdrawn.
•No RMD. Unlike the Traditional IRA account, the ROTH account has no required minimum distribution. So once an account holder becomes 70 ½ he is not “forced” to take withdrawals which could increase the tax liability in the later years.
•Tax Free Income. In its nature of being a ROTH account, distributions from this account are tax-free, if, a: the owner is over age 59 ½ and b: it has been five years since the conversion.
•Tax free income to Beneficiaries. If the account has been open for five years, beneficiaries can receive tax free income when inheriting a ROTH IRA.
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Alumni provide resourcing solutions during recession recovery |
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 Engineers See Bright Skies Ahead
While many industries remain subdued, and fears of a double dip recession hang over us, talent managers in the oil and gas industry are scouring the market for technical talent, with many recruiters finding that experienced technical professionals can ‘write their own tickets’ as the market regains strength. In fact, experienced professionals in the oil and gas industry tell us they have weathered the economic downturn better than most.
“Companies are contacting us again with great interest in finding their former employees. There is renewed priority on preparing for the upcoming skills gap. In addition, companies downsized, but are now finding new opportunities and some of the people who were let go will be well positioned to fill these new opportunities,” shares Cathy Clonts, President of AWS, which hosts a number of corporate alumni networks.
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Job satisfaction remains high in oil and gas industry |
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 In a recent Alumni Web Services’ (AWS) survey of its online networking and alumni community members in the oil and gas industry, members were asked how their job satisfaction compared to the 2007 SPE survey where 73% of respondents were satisfied. AWS members’ responses remained consistent to the SPE survey; 43% percent report they are equally satisfied and a whopping 31% report a higher level of job satisfaction than before the economic downturn. This is good news compared with a recent Conference Board survey of job satisfaction levels in the U.S. According to the nationwide survey, only 45% of Americans were satisfied with their work—the lowest level recorded in 22 years of the survey.
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