If you have a Traditional IRA, perhaps as a result of rolling over a 401(k) plan balance, should you convert it to a Roth IRA? I heard on the radio program Marketplace that someone got a patent on the thought process.
I looked it up and lo and behold it’s there. U.S. Patent 6,058,376 “Process for evaluating the financial consequences of converting a standard form I.R.A. to the Roth form I.R.A.” Here’s a quote from the summary of the patent:
“Disclosed is a computer-implemented process for evaluating the financial consequences of converting a standard format IRA to a new Roth form IRA. The process includes computing and disclosing the substantial federal income tax consequences involved in converting the standard form IRA to the Roth form.”
Whether one should convert from Traditional IRA to Roth IRA is basically a math problem. Given a set of inputs, you have a number for converting which you can compare against that for not converting. Although the output is highly dependent on the inputs (garbage in, garbage out), the process itself is a set of basic math formula.
How someone can put a patent on applying math formula is beyond me. It’s like me saying I have a patent on how to calculate 5 + 6. Perhaps I should apply a patent on my tax equivalent yield calculator. Nah, anybody can use that one for free.
There are patents on some ubiquitous stuff. I once saw on a plastic grocery bag that there are no fewer than 6 patents on it. The latest of which was granted in 2000. Yes, grocery bags. Aren’t they everywhere? Innovation is still going on in grocery bags? Here are the patent numbers if you are interested:
- 5,188,235 Bag pack
- 5,335,788 Self-opening polyethylene bag stack and process for producing same
- 5,363,965 Self-opening thermoplastic bag system
- 5,561,967 Self-opening thermoplastic bag system
- 5,863,130 Self opening thermoplastic bag system
- 6,105,780 Self opening thermoplastic bag system
Say No To Management Fees
If an advisor is charging you a percentage of your assets, you are paying 5-10x too much. Learn how to find an independent advisor, pay for advice, and only the advice: Find Advice-Only.