Congressman Joe Pitts (PA-16) today introduced the Reinvest in America's Retirement Act. The legislation would allow all individuals to convert any of their individual retirement accounts (IRAs) to Roth IRAs immediately.
Congressman Pitts' statement follows:
"Congress should be doing everything it can to create an environment that helps individuals rebuild their financial securityincluding their retirement savings. This legislation would allow individuals who have suffered significant losses to their traditional IRA to pay conversion taxes now instead of in the future when their fund will regain value, thus lowering their tax burden."
Starting in 2010, limits prohibiting some individuals from converting IRAs will be lifted. This bill would move up that date to allow conversions immediately, in order to allow individuals to pay the conversion taxes in a year when the value of retirement accounts is low because of the current economic recession. Roth IRAs are funded with income that has already been taxed, but the interest in the funds grows tax-free.