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You may want to consider converting some or all of your Traditional IRAs into a Roth IRA to take advantage of its long-term, tax-free benefits. Keep in mind, however, that upon conversion, you will owe income taxes on your investment earnings and on any deductible contributions made to your Traditional IRA.
When is it a good idea to consider converting an existing IRA to a Roth IRA?
A conversion may be advantageous if:
The reason? By converting your assets to a Roth IRA, you'll be paying your tax liability now - at a potentially lower rate-in exchange for tax-free growth and tax-free distributions in the future.
What are eligible contributions?
|Filing Status||Adjusted Gross Income||Eligibility for a $5,500 contribution1|
|Single||Up to $116,000||Full Amount|
|$116,000 - $131,000||Partial|
|Over $131,000||No contributions permitted|
|Married, filing jointly||Up to $183,000||Full Amount|
|$183,000 - $193,000||Partial|
|Over $193,000||No contributions permitted|
1 Taxpayers age 50 and older can make an additional "catchup" contribution to their IRA of $1,000.