The benefits of Roth IRA accounts are well established.  With Roth IRAs, you can make tax-free withdrawals in qualified situations (provided you meet certain holding criteria) and you don’t need to make required withdrawals by a certain age, as with traditional IRA accounts.  If you anticipate being in a higher tax bracket when you get older, a Roth IRA account can help save you money as the taxes on Roth IRA contributions are paid up front.

So why wouldn’t you convert all of your traditional IRA holdings to Roth IRA accounts right away?  Well, there are a few catches, perhaps the most noticeable of which is that you’ll have to pay ordinary income taxes on any funds you convert to your Roth IRA rollover account.  Let’s look at a few situations in more detail to see where a rollover IRA to Roth IRA conversion makes sense for you: (more…)