Schwab Adds New Roth IRA Conversion Resources for Investors, Advisors and 401(k) Plan Participants

Additional Resources Designed to Complement Personal Guidance to Help People Navigate the Roth IRA Conversion Decision

Wednesday, March 10, 2010 8:30 am PST



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"Highest in Investor Satisfaction with Self-Directed Services"

SAN FRANCISCO--(BUSINESS WIRE)--As the country gets into the heart of tax season, people are thinking about investing in IRAs as a way to help maximize tax savings and plan for retirement. For those people considering a Roth IRA conversion, Schwab is making additional resources and tools available to investors, independent investment advisor clients, and 401(k) plan participants designed to help navigate the decision making process.

Prior to January 1, 2010, only people with modified adjusted gross incomes of $100,000 or less were eligible to convert assets from certain retirement savings accounts, such as a traditional IRA or a 401(k) with a previous employer, to a Roth IRA. However, a recent rule change now makes more investors eligible to convert regardless of income level.1

Quick Assessment, Webcast and Online Videos for Investors

For investors seeking help and guidance regarding Roth IRA conversions, Schwab has recently launched an Online Quick Assessment in which investors can answer a few brief questions to explore whether a Roth IRA conversion might make sense for them. The questions focus on current retirement accounts, expected time horizon to retirement, estate plans, and conversion taxes. After completing the questions, investors receive tailored next steps to further explore if Roth IRA conversion is appropriate. The tool also pops up useful tips and explanations during the process to help people understand the considerations and rules around conversion.

Schwab has also produced a webcast entitled, Roth Conversion – Is it Right for You?, featuring Mark Riepe, CFA, senior vice president at the Schwab Center for Financial Research, explaining Roth IRA fundamentals. The webcast, which is available at, covers Roth IRA basics, the differences between traditional and Roth IRAs, the benefits of Roth IRAs, when conversion may and may not make sense, when a partial conversion might be the right choice, and where to find help at Schwab. The webcast is also available for Schwab’s independent investment advisor clients.

In addition, Schwab has launched a series of short videos addressing investors’ common questions about Roth IRAs and Roth IRA conversion, including how a Roth IRA can help with estate planning, the benefits that may be available when converting to a Roth IRA, and some of the potential tax implications of a Roth IRA conversion.

Resources for Independent Investment Advisors – Roth Decision Guide, Conversion Calculator and Advisor Webcast

For its independent investment advisor clients, Schwab has created a Roth Decision Guide designed to help advisors guide their clients through a thoughtful consideration of the costs and benefits of conversion. The guide can help advisors answer initial questions their clients might have, such as the benefits of a Roth IRA and details about the conversion rule change. A Roth Decision Matrix helps advisors discuss key considerations with their clients that can influence the decision to convert and how much to convert. Some of the key considerations in the guide include expected future tax rates, a client’s time horizon to retirement, the client’s ability to pay taxes from a non-IRA account, impact on a client’s current tax bracket, and the client’s estate planning needs.

As part of the Roth Decision Guide for independent advisors, Schwab also has a Roth conversion calculator that enables advisors to provide their clients with a comparison of Roth IRA and traditional IRA ending values, estimated taxes due from the conversion, and suggested next steps.

In addition, Rande Spiegelman, CFP, CFA, vice president of financial planning for Schwab, hosted a webcast for Schwab’s independent advisor clients in December 2009, which provided an overview of key considerations advisors should address when discussing Roth IRA conversion with their clients. Specifically, the webcast addressed factors for advisors to consider before recommending a conversion, using a Roth conversion as an estate planning tactic, and whether a partial conversion may be a better option for some clients. The webcast replay is available to advisors online.

Schwab is also making available for independent advisor clients a Roth conversion FAQ and an archive of articles discussing various topics related to Roth conversion to help advisors prepare for discussions with their clients.

Online Roth IRA Workshop for 401(k) Plan Participants

For 401(k) plan participants seeking information about Roth IRAs and Roth IRA conversion as part of their overall retirement savings strategy, Schwab has added an online Roth IRA conversion workshop to its Financial Education Center for participants. The online workshop, which is broken up into short topical segments, is designed to give 401(k) plan participants clear guidelines and easy-to-understand information that will help them determine if converting to a Roth IRA is right for them.

The new resources are in addition to Schwab’s existing Roth IRA Conversion Calculator, Roth IRA conversion Q&As, and key considerations for Roth IRA conversions, which are available on Schwab’s Roth-dedicated site Schwab is also offering clients personalized guidance and analysis regarding Roth IRA conversions, including a discussion of key Roth IRA considerations and a customized report with a comparison of an individual’s estimated financial results with and without a Roth IRA conversion, the potential impact on taxes and an individual’s current tax bracket, and the impact of various scenarios to keep in mind when evaluating different possible conversion amounts.

1 Changes to Roth IRA conversion income limit rules may not apply in all states. Certain states may impose penalties on conversions above the current income limits. Consult with a tax advisor for more information.

The information provided in the tools and assessments referenced here as available on are intended for general informational purposes only and should not be considered personalized tax, legal, or estate planning advice. Charles Schwab & Co., Inc. does not provide tax or legal advice and makes this report available as a convenience for your use. Where specific advice is necessary or appropriate, Schwab recommends you consult with a qualified tax advisor, CPA, financial planner or investment manager.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.7 million client brokerage accounts, 1.5 million corporate retirement plan participants, 739,000 banking accounts, and $1.4 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Named "Highest in Investor Satisfaction with Self-Directed Services" by J.D. Power and Associates in 2009, its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,, and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at (0310-1757)

© 2010 Charles Schwab & Co., Inc. All rights reserved. Member SIPC

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Mark Riepe, CFA, senior vice president at the Schwab Center for Financial Research, explaining Roth IRA fundamentals (Graphic: Business Wire)

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