Here's Everything You Should Consider Before Converting Your IRA To A Roth

In this edition of our Motley Fool Conversations series, Fool personal finance expert Dayana Yochim and retirement planning analyst Dan Caplinger discuss whether converting traditional IRAs and 401(k) plans to their Roth counterparts is a smart move.

Although you pay taxes up front on a conversion, the payoff is that you never have to pay taxes on your Roth assets again — even when you take withdrawals during retirement.

Dan and Dayana go through the pros and cons of doing a Roth conversion with some specific ideas on helping you make the right decision for your own personal financial situation.

In addition, Dan points out how you can take advantage of special “do-over” provisions of Roth IRA conversions in order to maximise your returns in stocks facing big binary events that will make or break their futures.

Overall, whether converting makes sense depends on what your current tax rates are compared to what you expect they’ll be when you retire.

This story was originally published by The Motley Fool.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.