Roth questions

[bornloser]

Have converted all traditional to Roth category IRA. Each year do a backdoor.
Question 1: Is it best to open a traditional, then do a conversion the next day to avoid a gain and therefore a taxable event (ie, start money market traditional IRA one day, then convert to Roth the next)?
Question 2: I have monies in a 401k and in 403b accounts. When I retire and drop into a lower tax bracket, is it possible to convert small amounts of either a 403b or 401k to a Roth IRA?

Thanks

[Penguin]

question 1: That is how I do it.
question 2: Most IRA questions can be answered in IRS Pub 590 http://www.irs.gov/publications/p590/ch ... 1000231029

Rollover From Employer's Plan Into a Roth IRA

You can roll over into a Roth IRA all or part of an eligible rollover distribution you receive from your (or your deceased spouse's):

Employer's qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan);

Annuity plan;

Tax-sheltered annuity plan (section 403(b) plan); or

Governmental deferred compensation plan (section 457 plan).

Any amount rolled over is subject to the same rules for converting a traditional IRA into a Roth IRA. See Converting From Any Traditional IRA Into a Roth IRA in chapter 1. Also, the rollover contribution must meet the rollover requirements that apply to the specific type of retirement plan.

Rollover methods. You can roll over amounts from a qualified retirement plan to a Roth IRA in one of the following ways.
Rollover. You can receive a distribution from a qualified retirement plan and roll it over (contribute) to a Roth IRA within 60 days after the distribution. Since the distribution is paid directly to you, the payer generally must withhold 20% of it.

Direct rollover option. Your employer's qualified plan must give you the option to have any part of an eligible rollover distribution paid directly to a Roth IRA. Generally, no tax is withheld from any part of the designated distribution that is directly paid to the trustee of the Roth IRA.

Income. You must include in your gross income distributions from a qualified retirement plan that you would have had to include in income if you had not rolled them over into a Roth IRA. You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions (after-tax contributions) to the plan that were taxable to you when paid. These amounts are normally included in income on your return for the year of the rollover from the qualified employer plan to a Roth IRA. For 2010 rollovers, special rules apply. See How to treat 2010 rollovers to Roth IRAs next.

[retiredjg]

Question 1: Is it best to open a traditional, then do a conversion the next day to avoid a gain and therefore a taxable event (ie, start money market traditional IRA one day, then convert to Roth the next)?

Best as opposed to what?

Question 2: I have monies in a 401k and in 403b accounts. When I retire and drop into a lower tax bracket, is it possible to convert small amounts of either a 403b or 401k to a Roth IRA?

Yes. You can roll 401k or 403b money out into a traditional IRA or a Roth IRA. If you choose Roth, you will pay taxes. Or you could roll it all out to a traditional IRA (no taxes) and then convert whatever amount your want to Roth IRA (taxes due).

Some people like to postpone SS and convert some to Roth each year - for example, up to the top of the 15% tax bracket.