Easing the way to a Roth
There's good news if you stand to inherit a 401(k): The IRS recently gave children, siblings, unmarried partners, and other "nonspouse" beneficiaries the option of transferring the cash to a Roth IRA. Before, those who wanted to switch to a Roth had to first roll the money into a regular IRA and then transfer it into a Roth. Now, just like 401(k) participants who retire or leave a job, beneficiaries can transfer the cash directly to a Roth.
Plan sponsors aren't required to offer such transfers, so be sure to check. Also, people with annual incomes above $100,000 aren't eligible. Be aware, too, that on conversion, an inheritor will pay income tax on the account's value.
Why bother? Money ultimately pulled from a Roth isn't taxed. So the switch makes sense if you think your tax rate will rise. "With our budget deficit, tax rates are likely to head up," says Ed Slott of newsletter Ed Slott's IRA Advisor.
How to Bet on 'Cleantech'
With the bewildering array of technologies and companies vying to solve the world's energy woes these days, spotting solid investing opportunities is a challenge. BusinessWeek enlisted Jack Uldrich (photo), author of Green Investing, to share his insights.
A lot of alternative-energy companies are small. Are any big players positioned to take advantage of "cleantech" trends?
General Electric's (GE) Jeffrey Immelt says he wants to grow at 10% a year. The only way he can do that is to increase the company's energy division. If you look at all the areas—from wave power to nuclear to clean coal to solar—GE is in all of them.
Some solar stocks, such as Suntech Power (STP) and SunPower (SPWR), are down over 50%. Is now the time to buy?
In general, solar stocks are still a little pricey, but they make a good long-term investment. Solar cells are expensive, but manufacturing costs are going to go down. With advances in the material sciences and nanotechnology, solar will get more efficient, and consumers will find solar products more affordable.
Is there a "cleantech Google" that will make me a millionaire overnight?
No. As promising as some of the smaller cleantech players are, they can't push out their technologies without a big company acquiring them because energy is a large-infrastructure play. It will have to be a combination of a few [smaller] breakthrough technology companies, plus a lot of the big guys.