Marty: Welcome everybody. This Marty Higgins coming to you on behalf of the New Jersey Educational Finance Institute. The institute was created to provide financial education to individuals and business owners, as well as attorneys and CPA’s looking to become better informed about financial services and their discussions with their clients. Today’s topic is going to be on Roth IRA’s and the Conversation opportunities that ally as we go forward into 2010. I just want to remind you, the last months call with AST Capital Trust on Trust versus your Trustees is posted on the website, so you should be able to listen to that by going to www.familywelathadvisory.com and going to the section for the client education. I’ll announce next month’s topic after we’re finished. But today, we have with us Doug Ewing. He’s a JD and CFP, and Doug joined John Hancock in 2007 after spending twelve years as a practicing attorney and five years as a financial advisor. He has extensive hands-on experience working with high network clients, including business owners, corporate executives, and professional practices in many different capacities. Doug obtained his law degree Cum Laude from Suffolk University Law School in 1990. He served as the managing editor as the Suffolk Transitional Law Review. He obtained his BA Magna Cum Laude from the University of Massachusetts at Amherst. Doug’s a member of the Massachusetts Bar Association, a certified financial planner designee, and he also holds the NASD Series 7 and Series 66 Designations. Welcome Doug. Doug: Thank you, Marty. Let me just begin by giving a little disclaimer. Usually when I give these talks, I’m presenting to groups of financial professionals, and I recognize there may be some financial professionals in the audience. For those of you who aren’t, it’s important that I just give a little disclaimer. As an attorney, my primary responsibility is to provide legal support to John Hancock’s Sales and Marketing Operations. I cannot give individual, legal advice to anybody in the audience, and it’s not my intent to do so. If you plan on implementing any of the strategies that we talk about today, I strongly encourage you to consult with your own financial tax and legal professionals before doing so. So, with that out of the way, let me…. Marty: Let me do a little housekeeping, Doug. Let me just tell everybody that if you want to ask a question, if you’re listening on your phone, you can press *2 to raise your hand. You’ll show up on my screen, and then I’ll address you for your question. We can do that actually as we go along. If we don’t have any, we’ll open it up at the end. Then, if you’re listening on the website, you can just post your question right on the website, and I’ll see it and I’ll ask Doug at the end. We’re going to talk about the 2010 Roth Conversion Opportunity, and it’s been limited to everybody only with incomes under $100,000 right now, and that’s going to open up in 2010; it will give everybody the opportunity to do a Roth Conversion. I think this is very important. Doug will mention where tax rates are going to go, when we’re bailing out every Tom, Dick, and Harry in corporate America. I think it’s very important to understand how this opportunity works, and the little bit of leeway they’re going to give you in paying the taxes. So, Doug, let’s hear what your thoughts are. Doug: Yeah, well I think it’s helpful to just start at the beginning and just give a quick overview of what’s a Roth IRA and why are they attractive? Well, a Roth IRA is something that’s been around since about 1998. It’s sort of an alternative retirement savings vehicle. As you may be aware, when you invest in a traditional IRA, that is often tax deductible to you. While the traditional IRA grows tax deferred, when you ultimately take the money out, you have to pay ordinary income taxes on that money you take out. A Roth, by contrast, is different. Contributions are tax deductible, but they grow tax free. As long as you are age 59 ½ and you let the account cook for five years, when you pull money out of a Roth IRA, it’s completely tax free. Now, Roth’s have typically been available to middle and lower income brackets. Basically, you can’t open a Roth, unless for a married couple filing jointly, you make less than $166,000 a year. For single filers, it’s about $105,000. At that point, your ability to contribute to a Roth is phased out. Now, since Roth’s came along, the IRS has always allowed you to do something called a Roth Conversion, which means you take your traditional IRA and you convert it to a Roth by paying all of the taxes due on that traditional IRA. Now, up until 2010, that conversion opportunity has been limited to people who make less than $100,000 in adjust of gross income. So, in 2010, that $100,000 limitation is going to go away, so now for the first time, many of you in the audience will have this ability to do a conversion. So the next question becomes, well, should I do a conversion? That’s really what we’re going to look at today; when a conversion makes sense and when it doesn’t. Now before we get into that, I do want to mention kind-of a unique opportunity in 2010. What congress did is in conjunction with making the Roth available to a larger group of tax payers, they also created an incentive if you will, to go ahead and do the conversion in 2010 by implementing a one year rule. If you do a conversion in 2010 and 2010 only, you can spread your tax liability out by paying half of the taxes that you owe in 2011 on your 2011 return, and the other half in 2012 on your 2012 return. Now this ability to stretch out the tax payment applies to 2010 only. If you do the conversion in 2009, of if you wait and do the conversion in 2011, you will have to pay all the taxes due on that conversion at the time, in that tax year that you did the conversion. Marty: Now it’s important to know also, I guess Doug, is that the taxes, assuming there’s growth on the account, they’ll be paying taxes on the lower amount. Is that true? Let’s say they have a $100,000 IRA and they’re going to do a conversion, do they pay taxes on the $100,000 and then spread it out over those years? They don’t have to wait until that following year comes up to see what the growth is? Doug: No. Basically as a tax payer, you have a choice. If you do the conversion in 2010, you can do one of two things. You can either go ahead and pay the taxes...the amount that you pay taxes on is locked in at the time that you do the conversion. So, I do the conversion in January of 2011. My account value is $80,000. I’m paying taxes on $80,000. Even if the account’s worth $120,000 in 2011 when I actually pay the taxes, I’ve locked in that lower account value. That’s something we’re going to talk about, because having a depressed market right now creates an opportunity to do a low-cost Roth conversion. Marty: Right. So if the account were to grow over the next couple years, and we’d have to assume that coming out of a bare market there’s a possibility that could happen between 2012, they’re really paying taxes on the seeds and not the harvest. Doug: Exactly. Marty: What if it goes the other way? Doug: If that account value goes down, and we’ll get to this, but we can cover it now. If the account value goes down, the IRS basically lets you take a mulligan. You get to re- characterize the account back to a traditional IRA. If I had an account that was worth $70,000 when I did the conversion, and now it’s worth $60,000, I have until my tax filing deadline plus extensions to go ahead and re-characterize it. Basically treat it as though I hadn’t done a conversion at all. I won’t owe any taxes. Now, interestingly enough, you can, subject to certain waiting periods, you could then go back and reconvert it at a lower amount to try and lock in an even lower account value at that point in the future. Marty: Yeah. Of course you’d loose the spread-out, but you’d still pay less tax. Doug: Right. So, when you’re thinking about doing a Roth Conversion, there are important considerations. These are really the key issues. First of all, what’s your investment time line? How long do you have before you’re going to need that money? The longer your investment horizon, your investment time line… or another way to look at it is, the younger you are, the better the Roth Conversion is typically going to work. In all likelihood, you’re going to have growth over time. You’re paying taxes on a much lower amount, so the longer you have to invest, so to speak, the better the conversions going to work. The other thing you have to do is you have to look at, “Hey, what’s my tax bracket now versus what it’s going to be in the future?” A Roth Conversions typically going to work best if you’re in a lower bracket now and you anticipate either that you’re making more money, or the taxes are going to rise, that you’re likely going to be in a higher tax bracket in the future. If you’re in your peak earnings years, and you’re already up in that 33 or 35% bracket, and you think when you retire, that you’ll be able to live off of a much lower income stream, and accordingly you’ll be in a lower income bracket, then those are the circumstances where hey, a Roth Conversion may not necessarily make sense. If you the conversion, you’ll be paying taxes at that income from the conversion is basically piled onto whatever other income you’re making that year. So the entire conversion would be taxed at your highest marginal bracket. Versus if I’m turning around now, and I go into retirement and estimate what I can probably live on, let’s say $137,000 a year, well I won’t even get to the 28% bracket. In fact, my effective tax rate, which is the average tax rate I pay based on those lowest brackets, is only about 19%. So that’s an important thing to consider, when you’re looking at the conversion opportunity. Then finally, very important point, is do you have the money available to go ahead and pay the taxes on the conversion? I’m talking about money available from some other source, not the IRA itself. The reason this is important is if you think you’re going to pay the taxes from the IRA, you may want to reconsider whether you want to do the Roth Conversion at all. First of all, as you pull that money out of the IRA to pay the taxes, if you’re not 59 ½, you could be subject to a 10% additional tax. Then beyond that, you’re going to have to pay taxes on this money that you’re pulling out to go ahead and pay taxes. It’s really not very efficient. But maybe most importantly, by doing that, now you’re going to end up with a Roth IRA that’s worth substantially less than your old traditional IRA used to be worth. You haven’t really gained too much in that process. So, having assets outside of the IRA is pretty important in taking advantage of the Roth opportunity. Marty: I couldn’t agree more. I heard one person say that it’s kind of like eating your young. I mean, there has to be outside assets. For an individual who has all their money is in their IRA, then that doesn’t make as much sense, or is even probably a good idea. So, the people who are listening to this that have outside assets that they can afford to pay the taxes with, you should discuss it with your advisor, because you’re probably a good candidate for this. Doug: Now what I’m going to do is for those of you who don’t know, I’m working off a piece that was written by a colleague of mine by the name of Brandon Buckingham. What we’re going to do now is we’re going to look at nine potential conversion opportunities. These are reasons why you might want to consider going ahead and doing a conversion. The first one has to do with the current market environment. We’re in a depressed market right now. We’re still well below people’s peak account values back in the fall of ’07. So, this is a low-cost conversion opportunity, because as we mentioned a few minutes ago, when you do the conversion, you’re basically locking in your tax liability. It’s going to be based on the amount of the conversion on the day that you actually do the paperwork and convert the account. It’s kind of a silver lining to a bad situation. Yeah, nobody likes seeing their account values down, but hey, if you are thinking about doing a conversion, now you can convert at that lower account value, which is beneficial. Again, as we discussed, if the account continues to go down, you can take a mulligan. You can basically turn it back to a traditional IRA. Let’s face it, what would be worse than having to pay taxes on $70,000 when the accounts only worth $60,000? The IRS actually recognizes that, and you have this option of re-characterizing it back to a traditional IRA. Now, as Marty mentioned, we’re going into a period where we are very, very likely to see increased tax rates. We’ve had the bailouts. We’ve had the stimulus bills. We are looking at record federal deficits. Not records by a little, records by a lot. If you’ll look back historically, believe it or not, we are in a period of historically low rates. I know it doesn’t feel like it, but in the past, in the post World War II era, we’ve seen top marginal rates as high as fifty, seventy, even ninety percent when you look at federal plus state taxes. So, the idea that taxes could start drifting back up into that area, it’s not out of the realm of possibility. Right now, there are concrete proposals in front of Congress to increase the top two marginal brackets from 33-35% and from 35% to almost 40%, 39.6. In a lot of states, you’ve got high state income taxes that get piled onto that. You’re already looking at top marginal rates of around 50% if that legislation goes through, and every indication is that it will. You can’t pick up a paper now-a-days without somebody in Congress floating a proposal to increase taxes making over a couple hundred thousand dollars a year. Increased tax rates are coming. What a Roth Conversion now can do, is if you do the conversion in 2009, for example, you’re going to pay a 2009 rates. If you do the conversion in 2010, you have a little bit of a conundrum. Now we don’t think that these higher tax rates are likely to go into effect before 2011, but they probably will be in effect in 2011. So what you’ve got to look at if you do a conversion in 2010, you’ve got to kind of just work the numbers and figure out, should you try to pay the taxes in 2010 in order to take advantage of probably lower rates? Or does it make more sense to split it out over 2011 and 2012, even though that those higher rates may be in place during that time? That’s very simply a math problem that you have to sit down with your advisor and try to figure out. Marty: I think the easiest way to explain that too is the way that I explain it to clients here. If you were a farmer, would you want to pay taxes on the seeds in the spring or the harvest in the fall? Now, expect these accounts to grow, because they may have a twenty year or more life expectancy before they’re passed on. I’m sure you’ll get to that. What happens when they’re inherited? But, if you’re going to be taking those withdrawals from that money, do you want to pay the tax now on the seeds or on the harvest if that account grows? We haven’t’ even considered, we’re talking about the income taxes both federal and state. For some people, there may be another tax involved in the Social Security. Doug: Yeah. We can talk about social security and how that works in just a minute. What you have the ability, with a Roth Conversion, what it gives you the ability to do is have multiple buckets of money with different tax treatment. We know how important diversification is in terms of asset allocation and what asset classes you’re invested in. Now you can have tax diversification too by having different buckets of money. We’ll get to that in just a couple of minutes. Next concept I wanted to discuss is, well, for a lot of people that are going to be sitting there; let’s say you’ve done very well in your life and you’re getting ready to retire, and you’re sitting on a million dollar IRA. You’re looking at this conversion opportunity, and you’re thinking, “Man, I’m in the 35% bracket. If I do the conversion, I’m going to have to pay $350,000 in taxes.” For a lot of people, that’s kind of tough to stomach, writing a check to the IRS for $350,000. That’s not going to be very attractive to a lot of people. It’s important that you understand that if you have a traditional IRA, it’s taxable. So, what’s it really worth? If you’re in the highest brackets on an after-tax basis, it’s worth $650,000 to $700,000, something along those lines. However, if you go ahead an and convert it, yeah, you’re writing a check to the federal government for $350,000, but when you go back and you wait that five years and you turn 59 ½, what’s your IRA really worth? Assuming, even if there’s no growth, well now you’ve got an IRA that’s really worth a million dollars. It’s tax free. It’s almost as if you’ve moved the money from that taxable account that you used to pay the taxes, into the Roth IRA, because of the tax-free nature of the account. That’s something to keep in the back of your mind when you’re laboring over that issue of, “Geez, do I really want to write that check to the federal government?” Yeah, it’s a tough one to swallow, but you’re going to see a benefit in the after-tax value of your Roth IRA. It’s almost like you get that money back. Marty: That’s a good key to have your advisor run a feasibility study for you, so you can actually… people get it more when they see their numbers. Doug: Yep. Tax diversification, I just already touched on this, this ability to have different buckets of money. This can be very effective in a couple of different ways. The first way it can be effective, is it can help keep you in lower tax brackets in retirement. Everybody’s got their number that they need every year to live off of. They need a certain amount of income. Let’s say it’s $100,000 a year. Well, you can take as much as $86,000 in income and still be in the 15% bracket. So why not, in order to go ahead and take as much as you can without leaving the 15% bracket, and then use the tax free Roth money to supplement your income without bumping you up into a higher tax bracket? It allows you to manage your tax exposure. In a very similar situation, one of the things that a Roth IRA can help you do is keep your Social Security benefits tax free in retirement. The IRS will allow you to have a certain amount of income and still get your Social Security benefits tax free. For a married couple filing jointly, it’s $32,000. Well, that’s great. A lot of people can’t manage to live off of $32,000 plus their Social Security. If you have money in a Roth IRA, you can take that. It does not count as income for purposes of determining the taxation of your Social Security benefits. By having a Roth bucket that allows you to take that tax free income, it also allows you to manage your tax liability so that your Social Security benefits can retain their tax-free characteristic. So that’s a nice illustration of how having different buckets of money can help you out. Now, as we’re looking at the opportunity, we already talked about that idea of writing a check to the IRS. So, what if you could do a conversion without having to write a check to the IRS? That’s an optimal situation. Anytime you can do that, you want to be looking at the opportunity. I’ll share with you a story about a gentleman I worked with back when I was an advisor. It shows the power of tax-loss harvesting or sort-of opportunistic Roth Conversion opportunities. This is a guy who’s working as a software engineer. He was burnt out, and he decided he didn’t want to do that anymore. What he really wanted to do was be a business owner. He went out and bought a franchise in a company called The Maids. They’re a housekeeping service. He had some income from his job that year before he left. Then he had some business income, because he was picking up clients and all of that. He had a tremendous amount of deduction he could take. During that year, he was getting his business up and running. He was buying feather dusters and vacuum cleaners and whatever else you need to run a housekeeping service. He had all these deductions. At the end of the year, we were scratching our heads, because he’s like, “Geez, I’ve got all these deductions. I don’t have enough income to take all of my deductions.” Well, guess what? He had a traditional IRA with me. It was just about the right amount, so that when we converted it, it added income to him, and it allowed him to take all these other deductions, that otherwise he would have either had to carry forward or might have lost or file amended returns and all this stuff. So, it was a great opportunity for him, because he had all these excess deductions to go ahead and do a conversion without having to write a check to the federal government. If you’re a business owner, or somebody who finds themselves being able to take a lot of deductions, and if you’ve ever been in a situation where you thought you were going to loose deductions or not be able to take them, consider doing a Roth Conversion. It’s a perfect opportunity to do the conversion without writing a check to the federal government. Marty: That’s a great point, Doug. Doug: Yeah. Now the next three points we’re going to cover have to do with sort of estate planning and legacy planning. I believe that maybe the most compelling argument in favor of doing a Roth Conversion, has to do with legacy planning. This is, how do I, in a tax efficient manner, pass as much money on to my next generation as possible? A Roth Conversion can have tremendous impact in how much wealth you inherit. I say this all the time, half kiddingly, but I really believe it’s true. There’s just nothing better in this world to inherit than a Roth IRA. If you can convert to a Roth, especially if you’re in a situation where you don’t necessarily need the money from your IRA; a Roth conversion will eliminate one problem that you’re going to have, which is with traditional IRA’s, you have to take a required minimum distribution once you turn 70 ½. That’s taxable money. You may have clients who don’t necessarily want that taxable income later on in life. They may have other non-qualified assets that they can live on, other sources of income like rental property or something like that. They’d much rather just grow that IRA as long as they can without touching it and then pass it on to the next generation, they’re kids for example. Well, for that person, a Roth Conversion makes a whole lot of sense, because for one thing, the money that you’re paying in taxes, you’re getting out of your taxable estate. Right now, anybody who’s got a gross estate worth more than $3.5 million has a potential estate tax problem. If you’re working with somebody, if you find yourself in that situation, one way that you can reduce the value of your gross estate is by going ahead and doing a conversion and paying those taxes. That money that you pay to the IRS is no longer in your taxable estate. So the conversion has the benefit of potentially reducing your taxable estate. In addition, when you pass a Roth IRA on to beneficiaries, it retains its tax-free characteristics. If I inherit a traditional IRA, I will have to start taking required minimum distributions, and I will have to pay income taxes on that money. If I inherit a Roth IRA, I have to take minimum distributions as a beneficiary. Remember, owners don’t have to take RNB’s, but beneficiaries do. It’s tax-free money, and it can continue to grow tax free while I’m taking my life expectancy distributions. Let me cover one topic before I get back into that tax exempt stretch idea. A lot of people have done their estate planning, and what’s happened as a result is they’ve been told by their attorneys that they should make a trust the beneficiary of their IRA. A lot of people do this so that they can control the distributions from the IRA to beneficiaries over time. That can be an effective strategy, but with a traditional IRA, you always have to be extremely careful about having a trust as a beneficiary. What that can do is you can fall into a tax trap. It can also defeat the effectiveness of the trust. As money is paid from the traditional IRA to a trust, it’s taxable income. Trusts are taxed very aggressively. You get to the 35% bracket at $11,150. So, what happens is the trustee of that trust now has a dilemma. They can either pay all the income out to the trust beneficiaries, so that they can pay income taxes on it at their own rates, or if they leave it in the trust and let it accumulate in the trust, they’re going to whacked at the 35% bracket. So, this does result in what are called conduit trusts, where the trust simply serves a vehicle to take the distribution and then pass it to beneficiaries. A lot of times, that’s not what somebody wants to do with a trust. The whole purpose of the trust is to restrict the distribution to beneficiaries. So, the bottom line is if you have a trust as the beneficiary of your IRA, you should really look at doing a Roth Conversion. What that does, is that gives the trustee tremendous flexibility, because while the IRA still has to pay money into the trust now, it’s tax-free money. You’ve gotten rid of that problem of that 35% bracket for the trust. It allows the trustee to simply accumulate those distributions in the trust, and then maybe dull them out to beneficiaries at a more measured pace. This is particular true where, for example, if the beneficiaries of the trust are, for example, grandchildren. You’ve got a fifteen, sixteen, or seventeen year old grandchild; you don’t necessarily want to be paying them a lot of money to avoid taxes. By having tax free money go into that trust, the trustee could maybe wait until those grandchildren got much older, like twenty-five or thirty years old before starting to pay them income from the trust. Roth Conversions are very effective in trust planning. Then finally get back to the topic that I started on a minute ago. Tax-exempt stretch, and there’s an example I’m going to sight in our piece. When you inherit a Roth, I’ll use myself as an example. I’m forty-five years old. If my mom died and left me a Roth IRA, unlike her, I do have to take required minimum distributions; but, only over my life expectancy in the year following death. So, I’m forty-five years old. I go to the publication 590 with the IRS, and I look up my life expectancy; it’s forty years. I would only have to take one-fortieth of the value of that Roth IRA out as a distribution. I can let the rest continue to grow tax free over my lifetime. Next year, I’d have to take one thirty- ninth; the year following, one thirty-eighth, and so on. By the time I turn eighty, I wouldn’t have to clean out the account until I turn eighty. That’s a tremendous period of tax-free growth. Just to give you an example, if you’ve got a seventy year old client with $100,000 IRA, and he’s got a forty year old daughter, and this is just coming right from the piece that we’ll make available to you; if he’s in the 35% bracket and his daughter’s in the 35% bracket, if he didn’t convert that IRA, for one thing, he would save some money in taxes. When you’re looking at the net after-tax value of a traditional IRA, you always have to remember to keep a side account for that money that you saved by not paying taxes, not doing the conversion. If we take that amount, and we at 7% growth, and the daughter were to stretch the traditional IRA over her lifetime paying taxes on the distributions, she’d receive total distributions of about $980,000, which is pretty good. Stretch, even for a traditional IRA is very powerful. That same daughter, if he had done the conversion, paid the taxes, and then he doesn’t have to take required minimum distributions; and then the daughter inherits the account, and she takes life expectancy distributions over her lifetime that are tax-free to her, the total net after tax distributions would be about $1.4 million almost $1.5 million. It’s about a fifty percent increase in the amount of wealth that he was able to pass to his daughter by doing the Roth Conversion. To summarize, I think that for clients, or for people who are wealthy or well-off, or don’t necessarily need the IRA assets to live on, then those are very good candidates for a Roth Conversion. It’s a very powerful tool for legacy planning. Marty: Doug, a comment, going back to your trust planning and such, I think that it speaks to the advantages of doing estate planning with a team approach. A lot of times, the attorney maybe drafts a trust and says to make the IRA beneficiary the trust, but I think the most successful estate plans are when the attorney, the CPA, and the financial advisor all come together. Doug: You know what, I couldn’t agree more Marty. I really couldn’t. I can say this, because I am an attorney. Attorneys are very good at the technical aspects of estate planning, but where I have found in my interaction with attorneys, that sometimes they are not as well versed as they should be, having to do with some of these issues like a Roth Conversion, the ability to convert to a Roth. For example, what the implications are, if you leave an IRA to a trust, from a tax standpoint. Sometimes working with variable annuities we see that the attorneys don’t really think through how a variable annuity works. For example, if somebody says, “Well, set up a revocable living trust, and have it be the owner of a variable annuity.” Well, that doesn’t always work very well. Attorneys don’t understand that a variable annuity as an asset works a little bit differently as just a regular brokerage account or something that works very well in a revocable living trust. So, for all of those reasons, I completely agree what you said, Marty, a team approach is always going to pay dividends. Marty: I have one question that came over. A gentleman mentioned that he has an IRA. As a matter of fact, all of his assets are basically in the IRA. He mentioned that earlier we said that without any outside assets, doing a conversion is probably not as advantageous as somebody who has outside assets. He asks if there is anything else he can do? One thing that comes to mind is if the individual doesn’t meet his required minimum distributions, one thing they could entertain is taking those distributions, buying a life insurance policy appropriate to the approximate taxes that would be doing the conversion at death, and then having the spouse use the life insurance money to pay the taxes for the conversion at his death. Then convert to a Roth. Do you have any comment on that strategy? Doug: No, it sounds like a good strategy. I will say though, that it would have to be a spousal situation. The only way that would work is because the spouse has the ability to re-register the IRA and treat it as though it’s been hers all along. Basically, make it her IRA. A non-spouse would not be able to convert. When you inherit an IRA, you cannot convert an inherited IRA. It has to be converted prior to you inheriting it. Marty: Right, so for any married couples out there that don’t have a lot of outside assets, and perhaps do not need the minimum distributions, it would be way more advantageous rather than take the distributions, pay the taxes, and then invest them somewhere. Maybe take the distributions, pay the taxes, and then buy the appropriate amount of life insurance with that, so that… we’re talking about legacy planning now. You should see your advisor to run that feasibility study for you. Doug: Yeah, and I think one other point that I would like to just make is that when you go and you sit down with your advisor, you’ve got to be a little bit careful. One thing I will tell you, and some of you may have already done this. If you go out and Google Roth Calculator, you will find literally dozens and dozens and dozens of these Roth Calculators out there. You punch in your name and your rate of return and all of this, and it will tell you on an after-tax basis whether or not a Roth Conversion makes sense. In my sampling of these calculators, there seems to be a real pro-Roth bias in a lot of these calculators. I would suggest that when you sit down with your advisor and you look at all the factors to consider, you’re not always going to find that a Roth Conversion makes sense for you. To go back to an example I used early in the presentation, if you’re a corporate executive making a lot of money right now, and you’re in the highest brackets, but you know that when you finally retire; you know what, you’re going to kick back, maybe play a little golf, and you’re going to be able to live comfortably on a much lower income level, then the Roth Conversion may not make sense. What you’ve got to do in that scenario, what you’ve really got to do is a break even analysis, right? If you’ve got a million dollar IRA, you’re going to pay $350,000 in taxes, but on the flip side, if you don’t convert, you’re going to have a traditional IRA. You’re going to be pulling a $150,000 a year, paying on average about 21% to 22% in taxes, you’ve got to figure out how long it’s going to take before you pay $350,000 in taxes like you did with the conversion? For some clients, that break-even point is going to be so far off in the future, that it’s just not really going to make a whole lot of sense to go ahead and do the conversion. Our goal here is to help you understand the opportunity, help you recognize the good opportunities, but also understand that it’s not going to make sense for everybody. Marty: Right. I guess that goes back to my original point of you need to see your numbers, and exactly how it works for you. Any parting comments? Doug: No. Thanks for the opportunity. I’ll be happy to entertain any questions that people have. As I say, if you haven’t already seen it, we have a publicly approved piece available that you can request from Marty. We’ll get you a copy. It covers all these ideas and allows you to go through and re-visit all these ideas that we’ve discussed. Marty: Yeah, actually, we will be posting that to the web site, along with the call. So you’ll be able to download that from our website a copy of the white paper that Doug referred to today. It’s titled Getting Ready for 2010; Preparing for the Roth Conversion Opportunity. It’s a summary of his talk today. I appreciate you taking out the time. I know you’re very busy, and it’s lunch time. Now you can go grab a sandwich. I would just like to say that next money, on October 14 at 12:00 p.m., I will be interviewing Jennifer Clark. Jennifer is the plan-giving officer for the American Cancer Society, and she’ll be talking about charitable giving strategies, not only to the American Cancer Society, but in general to your community, to your church, or to any foundation. So, on behalf of the New Jersey Educational Finance Institute, this is Marty Higgins, and thanking Doug Ewing for assisting us today. Everybody have a good day, and I’ll look forward to having you on the call next time. Bye now.