Timothy Sumer

Should I Convert My IRA To A Roth - 5 Things To Consider Before Doing It Today, we're going to talk about five considerations you should make before doing a Roth conversion. First, what is a Roth conversion? Simply put, it's when you decide you want to take money from a pre-tax account - like a traditional IRA or a SEP IRA - and pay taxes on it to convert it to a Roth IRA. The reason for doing that is that you're ripping the band-aid off and paying the taxes now versus paying it later. Now, there are a lot of benefits to a Roth IRA, which we talk about in other segments. Now let's talk about five things you should consider before doing a Roth conversion. Roth Consideration # 1: Cost. When you do a conversion from a traditional IRA to a Roth IRA, you're going to get that converted amount reported on a 1099 that you get in the following January. You treat that amount as normal income added to your adjusted gross income, and you pay normal income t