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No. Take a $900 distribution and pay the tax.

 

If you leave $5000 in the Roth IRA, it will roughly double in 10 years, and you can withdraw $10,000 tax free.   If you take out the $900 tax bill, then the remaining $4100 in the Roth IRA will roughly double in 10 years to $8200 which you can withdraw tax free.

 

If you withdraw $5000 from the Roth IRA and invest in a traditional IRA, it will roughly double in 10 years but when you take the $10,000 out, you will owe $1500 or $2200 federal tax (or more), plus $500 to $1000 state tax, which will leave you with a lower net amount then if you just left the money in the Roth account.  And the tax hit will be worse if the Democrats take the White House and follow through on their promises to raise income taxes.

 

The math is only slightly in favor of your plan if you are in the 15% bracket, income rates never rise, and you will never live in a state that has income tax.

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