A. Roth IRA is attractive because if you don't convert, you will have to pay taxes when you make withdrawals in retirement, plus you must start making those withdrawals in your early 70s. Since 2010, anyone could convert deductible and non-deductible IRAs to a Roth IRA without any income limitations.
However, Roth IRA conversion is not a no-brainer, there are many complications. We will discuss them in this mini-blog series.
Not Available For All Funds
Not all funds can be converted to a Roth IRA, the following funds cannot be converted to a Roth IRA -
- Inherited IRAs
- Required minimum distributions
- 72(t) payments
- Hardship distributions
- Corrective distributions of excess deferrals
- Deemed deferrals
- Dividends from employer securities
In our next blog post, we will discuss another Roth IRA conversion complication.