MEMBER NEWS

New Year Means New Opportunities for Roth IRA Conversion,
According to Edward Jones Financial Advisor

Beginning in January, the income restrictions will be lifted for individual investors looking to convert their traditional individual retirement accounts (IRAs) to Roth IRAs, according to Melinda Dixon

Previously, investors with an adjusted gross income of more than $100,000 (filing individually or jointly) could not convert to a Roth IRA from a traditional IRA.

Investors will have to pay taxes when they convert to a Roth IRA. However, those who convert in 2010 may report the taxable income from the conversion in two equal installments over a two-year period, 2011 and 2012.

Investors who own a traditional IRA make contributions that may be tax-deductible, depending on their income levels. Traditional IRA earnings grow on a tax-deferred basis.

This means your money has the opportunity to grow faster than it would if it were placed in an investment on which you paid taxes every year.

On the other hand, Roth IRA contributions are not tax-deductible, but earnings grow tax free, as long as the investor holds the account at least five years and doesn't start taking withdrawals until at least age 59-1/2

Unlike a traditional IRA, a Roth IRA does not require distributions when one reaches 70-1/2.

Whether or not investors decide to convert to a Roth IRA, they should first consult with their tax advisors.

Edward Jones provides financial services for individual investors in the United States and, through its affiliate, in Canada. Every aspect of the firm's business, from the types of investment options offered to the location of branch offices, is designed to cater to individual investors in the communities in which they live and work. The firm's 12,000-plus financial advisors work directly with nearly 7 million clients to understand their personal goals -- from college savings to retirement -- and create long-term investment solutions that emphasize a well-balanced portfolio and a buy-and-hold strategy. Edward Jones embraces the importance of building long-term, face-to-face relationships with clients, helping them to understand and make sense of the investment options available today.

Edward Jones, which ranked No. 2 on FORTUNE magazine's "100 Best Companies to Work For 2009," is headquartered in St. Louis. The Edward Jones Web site is located at www.edwardjones.com, and its recruiting Web site is www.careers.edwardjones.com. Member SIPC.

Edward Jones, its associates and Financial Advisors do not provide tax or legal advice. Consult with your tax advisor before converting from a traditional IRA to a Roth.

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