Guide to the Conversion Decision

All the details on deciding whether to convert your traditional IRA into a Roth IRA.

Some time ago, the Wall Street Journal reported that only a small percentage of people who are eligible to convert traditional IRAs to Roth IRAs — and who would benefit from such a conversion — have done so. In a subsequent column, Jane Bryant Quinn commented, "That's too bad. Roths can be a terrific deal, for the right people." If you haven't made the move yet, you're in good company. But now it's time to get serious, so you don't let a golden opportunity slip through your fingers. Here's step-by-step guidance in making the decision.

Conversion Preliminaries
Visit this page to get the basic background information you need before you begin making your decision to convert (or roll) your traditional IRA to a Roth IRA.

Conversion Eligibility
Make sure you're eligible for a conversion or rollover before investing a lot of time on whether it's something you want to do.

Partial Conversion
This page explains why you might want to consider a partial conversion of your traditional IRA.

Advantages of Conversion
Here are the reasons many taxpayers will benefit from a Roth IRA conversion.

Disadvantages of Conversion
The other side of the coin: conversion isn't the best choice for everyone.

Conversion Consequences
Here's a description of the tax consequences of converting your traditional IRA to a Roth IRA.

How Much Conversion Tax
You should have a reasonable idea how much a conversion will cost before you decide to move forward. Here's how to estimate the tax cost — and how to refine your estimate.

Source of Funds for Conversion Tax
An important point on your conversion decision checklist: where will the tax money come from? The answer may affect your decision to convert.

Timeline for Using Your IRA
Another important question: how long will your money remain in the IRA following conversion? This question, too, affects your decision.

Periodic Payments
Technical issues for people who want to do a conversion after they begin receiving periodic payments from their traditional IRA.

The Future of the Roth IRA
A final stopping point. Are you worrying about changes in the law that may turn your Roth IRA from a peach into a lemon? Here's why I don't think you should.