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Conversion

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Roth IRA Conversion

A Roth IRA conversion lets you move some or all of your retirement savings—from a Traditional IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, or 401(k)—into a Roth account and take advantage of its unique benefits.

Need IRA help? Call 866-855-5636 anytime.

Is a Roth IRA right for you?

That depends on your personal situation and financial goals. Answer a few quick questions to see whether converting is right for you, and get tailored next steps.

Compare a Traditional IRA vs. a Roth IRA.

Roth IRA Conversion Quick Assessment

Your next steps
  1. 1.

    Do you currently have money in a retirement account, such as a Traditional IRA, Rollover IRA, old 401(k), or other employer-sponsored plan?

    Why this matters
    Close
    If you have money in at least one eligible retirement account listed here, or in a SEP-IRA or SIMPLE IRA,* you may be able to convert to a Roth IRA. Conversion could offer unique benefits, but keep in mind that whether it’s right for you depends on your personal situation and your financial goals. *SIMPLE IRAs can’t be converted until two years after they’ve been established.
    Next
  2. 2.

    Do you have only one Traditional IRA with only post-tax contributions?

    Why this matters
    Close
    If you’ve made only after-tax contributions (also known as post-tax or nondeductible contributions) to a Traditional IRA, you’ve already paid income taxes on those contributions and won’t be required to pay taxes again to convert those funds to a Roth IRA. However, your earnings on those funds will still be taxed.
    Next
  3. 3.

    Are you planning to leave some or all of your IRA assets to your heirs?

    Why this matters
    Close
    If you don’t think you’ll need to access your IRA for retirement expenses, a Roth IRA offers some unique estate planning benefits. You won’t have to take required minimum distributions (RMDs), and your beneficiaries can make income-tax-free withdrawals during their lifetimes.
    Next
  4. 4.

    Do you have at least five years before you plan to access your converted IRA funds?

    Why this matters
    Close
    Leaving your assets in your converted Roth IRA for at least five years gives you more time for potential tax-free growth, and it can help you recoup the costs of conversion. Additionally, if you’re under age 59½ and you need to access the funds you convert in fewer than five years, you could be charged an early withdrawal penalty.
    Next
  5. 5.

    Do you think your income tax rate when you make your first withdrawal of the converted funds will be higher or lower than it is at the time you convert?

    Why this matters
    Close
    If your income tax rate when you make your first withdrawal is lower than it is now, you’d pay less in taxes by not converting to a Roth IRA. However, whether you estimate that your future income tax rate will be more, less, or about the same as it is now, it’s also important to consider that tax laws may change over time, and they will be a critical factor in how much you’ll pay in taxes in the future.
    Next
  6. 6.

    If you convert, can you afford to pay all of the conversion taxes from a non-IRA account?

    Why this matters
    Close
    If you convert to a Roth IRA, you’ll need to pay income taxes on the amount that you convert. Using your IRA funds to cover these taxes will considerably diminish any benefits you’d get from converting.
    Next
  • Answer a few quick questions on the left to explore whether a Roth IRA conversion could make sense for you. You’ll also get tailored next steps, based on your responses.
  • It’s unclear if a Roth conversion will help you meet your financial goals.

    Making the decision to convert is complex, so further exploration and a closer look at your personal situation will likely be helpful. Take a look at the suggested next steps to see how Schwab can help you think through the decision.

    Start Over
  • Conversion is not possible at this time.

    If you don’t have savings in an eligible retirement account, you don’t currently have any funds that can be converted to a Roth IRA.

    Suggested next steps

    For personal assistance with building a plan for your retirement, contact a Schwab investment professional at 888-298-6558.

    Start Over
  • Consider converting all or some of your IRA savings to a Roth.

    Based on your responses, it looks as if a full or partial Roth IRA conversion could make sense for you. Here’s why:

    Since you have only one retirement account that contains only post-tax contributions, you’ve already paid income taxes on them. If you convert these funds, you’ll gain the benefits of a Roth IRA and only be required to pay taxes on earnings—not on your contributions. Of course, making the decision to convert is complex, and there are many factors to consider. Take a look at the suggested next steps to see how Schwab can help you think through all the considerations.

    Start Over
  • Consider converting all or some of your IRA savings to a Roth.

    Based on your responses, it looks as if a full or partial Roth IRA conversion could make sense for you. Here’s why:

    You indicated that you plan to leave some or all of your IRA funds to your heirs. With a Roth IRA, you won’t have to take required minimum distributions (RMDs), and your beneficiaries can make income-tax-free withdrawals during their lifetimes. Of course, making the decision to convert is complex, and there are many factors to consider. Take a look at the suggested next steps to see how Schwab can help you think through all the considerations.

    Suggested next steps
    Start Over
  • Conversion may not be right for you.

    Based on your responses, it looks as if a Roth IRA conversion may not make sense for you at this time. Here’s why:

    No matter your age, leaving your assets in your converted Roth IRA for at least five years can help you recoup the costs of conversion and give you more time for potential tax-free growth. Additionally, if you’re under age 59½ and withdraw the converted funds before the five-year window is up, you could be charged an early withdrawal penalty. Of course, making the decision to convert is complex, and there are many factors to consider. Take a look at the suggested next steps to see how Schwab can help you think through all the considerations.

    Start Over
  • Conversion may not be right for you.

    Based on your responses, it looks as if a Roth IRA conversion may not make sense for you at this time. Here’s why:

    If you think your income tax rate will be lower when you make your first withdrawal, higher future taxes may not be a concern. However, it’s important to keep in mind that your income tax rate may rise in the future even if your income is lower than it is now. Of course, making the decision to convert is complex, and there are many factors to consider. Take a look at the suggested next steps to see how Schwab can help you think through all the considerations.

    Start Over
  • Consider converting all or some of your IRA savings to a Roth.

    Based on your responses, it looks as if a full or partial Roth IRA conversion could make sense for you. Here’s why:

    Because you can afford to pay all of the conversion taxes without dipping into your IRA funds, you won’t be compromising your opportunity to benefit from potential long-term growth. In addition, you’ll avoid the 10% early withdrawal penalty that would otherwise be applied if you withdraw funds before you turn 59½. Of course, making the decision to convert is complex, and there are many factors to consider. Take a look at the suggested next steps to see how Schwab can help you think through all the considerations.

    Start Over
  • Consider converting all or some of your IRA savings to a Roth.

    Based on your responses, it looks as if a full or partial Roth IRA conversion could make sense for you. Here’s why:

    Even if you can’t afford to pay all of the conversion taxes on the total value of your IRA, you may want to consider a partial conversion. With this strategy, you could still benefit from some income-tax-free withdrawals in retirement, while paying less in conversion taxes. Of course, making the decision to convert is complex, and there are many factors to consider. Take a look at the suggested next steps to see how Schwab can help you think through all the considerations.

    Start Over

Take the next step.

Open a Roth IRA today.     Apply Now or call 866-855-5636.