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What is a ROTH Conversion?
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IRS rules allow you to convert pre-tax TRADITIONAL IRA assets or those from the retirement plans of former employers to a ROTH IRA at any time.

When funding a "pre-tax” account, the dollars contributed to the plan were not taxed. Conversion triggers taxes on the dollars converted to the ROTH.

Once converted to a ROTH, assuming a qualified withdrawal, no Federal taxes are due in the future. Any additional growth is tax-free for Federal tax purposes!

  • Many employer-sponsored plans that offer a "designated” ROTH account also allow for conversions.

  • The ability to convert pre-tax assets to ROTHs is coming for Federal employees and members of the Military that participate in the Thrift Savings Plan.


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