Roth IRA conversion rules

July 29, 2014

Is a Roth IRA conversion right for you this year?

If you have a traditional IRA, you might benefit from converting some or all of it to a Roth IRA. A conversion can allow you to turn tax-deferred future growth into tax-free growth. It also can provide estate planning advantages: Roth IRAs don’t require you to take distributions during your life, so you can let the entire balance grow tax-free over your lifetime for the benefit of your heirs.


There’s no income-based limit on who can convert to a Roth IRA. But the converted amount is taxable in the year of the conversion. Whether a conversion makes sense for you depends on factors such as:

  • Your age,
  • Whether the conversion would push you into a higher income tax bracket or trigger the 3.8% net investment income tax,
  • Whether you can afford to pay the tax on the conversion,
  • Your tax bracket now and expected tax bracket in retirement, and
  • Whether you’ll need the IRA funds in retirement.

We can run the numbers and help you decide if a conversion is right for you this year.
© 2014

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