that's often the big question with converting to a roth ira. the three factors, the first is really do you need to money right away. then how much are you going to have to pay in taxes to do the conversion and where is this money going to come from. you don't want to take it out of your retirement asset. the final thing you need to look at is where your tax bracket is going to be in the future. if it's going to be higher, this is something you want to consider. if it's going to be lower or if you need to money right away or have to d into the retirement, probably not a good idea. you can put in $17,500 or 23,000 if you're 50 or older and that is per taxpayer. so if you decide you want to mix it up and have different tax strategy, have a regular 401(k) and a roth 401(k), which is a great idea for many people, remember, that combined, you can only have that 17,500 or 23 thou ,000. >> thanks very much. our series is going to continue tomorrow with a look at women and retirement. how they're finding new ways to save despite living longer and facing

convert a regular ira to a roth ira, you'll be taxed but you can take the money out tax-free after 59 1/2. >> with the tax increase coming up, we're going to be putting more and more money into my rost ira and my traditional ira. >> for many, a varied investment strategy is an imperative. >> we're going to back to managing investments, and those folks who manage it the best will get to the finish line first. >> reporter: for "nightly business report," i'm sharon epperson. >> our series on tax tips will continue tomorrow with new ways to save for your retirement. if you've got questions, send them to us at nbr mail at cnbc.com. >> still ahead, a powerball fever hits the golden state. is it the answer to california's financial problems? first let's take a look at how commodities, treasuries and currencies did today.ys >>> many california residents are hoping to hit the jackpot so that'll be set for retirement. starting today, powerball lottery tickets went on sale in california. 34th state to join the nationwide game. our reporter tells us how much californians hope to hit. >> reporter:

they said, look, if you put money into these accounts, after tax,,into an ira or a roth ira, for example401(k) plan, we will not tax that money when you retire. that was the deal. right? now the obama administration is saying, no, no, no. we're going to erase that daily, sorry, we're changing the rules on you. this is why i think everybody with a 401(k) plan and ira, not just people who have amassed millions of dollars, are very nervous about this. what message does this send to people, tom? it says, you know what? actually, you shouldn't save money for retirement because if you do, we're going to take it away from you. and by the way, if you look at social security, you know this, tom. the social security benefits for the average person is maybe $15,000 a year. you need private savings to sulement social security. that's the idea of the kind of two or three-legged pool here. and now we're taking that leg away. >> what is -- listen, i never want to handicap washington. your town surprises me on a regular basis. does this have a prayer? >> no. no, not if -- in fact, i would bet to you, to

they said, look, if you put money into these accounts, after tax,,into an ira or a roth ira, for example401(k) plan, we will not tax that money when you retire. that was the deal. right? now the obama administration is saying, no, no, no. we're going to erase that daily, sorry, we're changing the rules on you. this is why i think everybody with a 401(k) plan and ira, not just people who have amassed millions of dollars, are very nervous about this. what message does this send to people, tom? it says, you know what? actually, you shouldn't save money for retirement because if you do, we're going to take it away from you. and by the way, if you look at social security, you know this, tom. the social security benefits for the averageperson is maybe $15,000 a year. you need private savings to supplement social security. that's the idea of the kind of two or three-legged pool here. and now we're taking that leg away. >> what is -- listen, i never want to handicap washington. ur town surprises me on a regular basis. does this have a prayer? >> no. no, not if -- in fact, i would bet to you, tom

they've moved back on that promise 20 years ago on roth iras.ut in after-tax money, i germany tee you when you start to get those benefits, they will do the same thing. this is a slow move cyprus is what we're experiencing here. >> can i spoo ec to those critiques, laerry? >> yes. of course. >> of course. >> here's the thing. the three of you always say -- and i happen to agree with you -- that you want to broaden the base, broaden the tax base. then every time somebody comes up with a loophole, you explain why you don't like it. it sounds like none of you would cap these retirement accounts, so very wealthy people could keep it in there. that is a very inefficient tax break. >> can i just say something? gosh, darn it, jared bernstein, why do you want to tax those most likely to save and invest and prop up the economy? that's what's at the root of this. that's what the president does not understand. the very people who have the highest propensity to save and invest are getting stopped out by this -- it's my tax cap on this deduction. you are no

i prefer doing a roth ira because it grows tax free before i would do a nonmatching 401(k).take your match. if you have one, then do roth ira, then do nonmatching 401(k)s. >> gretchen: sarah from michigan, we took out a hardship loan against my husband's fork income in 2009. now he's getting ready to leave this company for another job. we have not paid back all the money. what will happen to the money that is still in there? >> this is a really bad plan you've gotten yourself into a trap. you'll probably have to go to the bank and borrow the money and pay back the 401(k) loan, then roll your 401(k) into an ira. the problem is when you leave a company with a 401(k) loan, you have 60 days to repay the loan. if you do not repay it, it's considered an early withdrawal and you're going to get hit with your taxes and a 10% penalty. you'll get hit for 40 cents on the dollar. they're going to smack you for this move. >> gretchen: hopefully that viewer is listening. she has 60 days to figure it out. thank you for joining us today. >> thanks, gretchen. good to be with you. >> gretchen

this body then passed the roth ira in which i've been putting maximum of $5,000. if i'm lucky enough to earn the same rate of return as my counter parts who at the time were working for states and federal governments and received those acutarial returns of 7 to 8%, in 30 years i should have and in excess of $3 million to retire from. why is the administration so opposed to americans like me who want to save with our own money for our own retirement from doing so? >> congressman, i think you may be the one person who beats me in starting earlier with ira's. i was 17 or 18 when i started. i applaud people starting early. we're not discouraging people. we're on the contrary to start and stay in the pattern of saving for their retirement. the question of what the kind of maximum amount is, comes down to the hard choices we have to make in a tax code, in a budget where there are hard choices. at a time when most americans look forward to retiring with well under $100,000 of retirement savings, $3 million is quite a high a target. this was an attempt, to make balancing

less, as a matter of fact, despite all of the incentives in the marketplace for the 401(k), the ira's, rothany number. >> megyn: let me tell the viewers this, to me is sounds like a lot of money, 3 million dollars. wall street journal says that's roughly the value of a california police sergeant pension if she works for 30 years and works until age 50 and lives to normal life expectancy. you can get to 3 million without that much effort if you continue to make the deposits into the 401(k). >> and that will a cash equivalent and she will be receiving, this sergeant, $205,000 of benefits which creates an equivalent to 3 million even though that amount-- >> what does president obama want to happen to your deposits in the 401(k) once it reaches 3 million. he decided-- >> remember, george bush called himself the decider in chief. he was the decider. this president is the imperialist decider and insinuating himself and this government into so many corners and elements of our lives that it's stunning. >> megyn: they say that this would only save-- make the government about 9 billion dollars more i

ira. should i use my roth 401k?u're planning on spending something like and i ougan rv. u want to manage your tax bracket for your retirement. i won an rb to tour the country when i turned 60. that is a big ticket. it >> hundred 50,000 save in a broth. i would say the rest and account. he does not have enough say they will be a higher income-tax bracket for the retirement. i would go with the 401k. >> 9:18 a.m. and here's a look at our weather for this windy monday morning. are san jose camera has just been blowing around all morning long. you can see the camera is still shaking this morning. we expect breezy conditions to stick around with us all through this morning and all day today. the wind advisory isn't that right now until 8:00 tonight. watch out for down the trees and power lines, we've been saying that all this morning. when there is still high, and about of 22 mi. an hour, have monday at 20, san jose 21. we've seen gust of 2 30 mi. an hour. future cast four is focusing on the wind gusts for today but at 1