Changes in federal tax laws that take effect next year give high-income earners planning for retirement a decision to make: pay now or pay later.

Taxpayers making more than $100,000 a year in adjusted income will be allowed to convert to Roth IRA accounts from traditional IRAs after the ceiling is lifted at yearend. This means that 16 million Americans, according to tax returns filed with the Internal Revenue Service in 2007, may consider whether they want to make tax-deductible contributions if they have traditional IRAs or pay the taxes up-front and take tax-free withdrawals from a Roth IRA during retirement.

Higher-income households that could benefit from the income limit change are not rushing to switch, according to a survey released Monday by United Services Automobile Association in San Antonio. The national survey of 1,259 adults 45 to 64 years old showed that 9% of those with an IRA and household income of $100,000 or more were planning to convert in 2010.

Most IRA assets are held in the traditional accounts, according to a June report by the Investment Company Institute, a Washington mutual fund trade group. Investors held $3.2 trillion, or 89% of IRA assets, in traditional IRAs at the end of last year. Roth IRAs held $165 billion, or 5%, of all IRA assets.

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