Roth IRA conversion

Open a Roth IRA and take advantage of after-tax benefits as you save for retirement.

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 IRA. There are no age limits to convert, and as of January 1, 2010, the IRS eliminated Roth IRA conversion income restrictions, allowing you to start taking advantage of unique Roth IRA benefits even if your current income disqualifies you from making additional contributions after converting.

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Why should I consider a Roth IRA conversion?

Although you will have to pay current income tax on your Roth IRA conversion amount, moving your money can still be advantageous if you: 

  • Think you'll be in the same or higher tax bracket when you withdraw.
  • Won't need the converted funds for at least five years.
  • Can pay the conversion tax in cash.
  • Want to leave a tax-free financial legacy to your heirs.

The decision to initiate a Roth IRA conversion depends on your personal and financial situation, and should factor in your potential for a greater ending portfolio value, your estate planning goals, and your tax-risk diversification options. Answer a few quick questions to see whether converting is right for you, and get tailored next steps. 

To get a better picture of the unique advantages that a Roth IRA offers, check out our Roth IRA vs. Traditional IRA infographic.

Common questions

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This tax information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends that you consult with a qualified tax advisor, CPA, financial planner, or investment manager. Depending on the type of account you have, there are different rules for withdrawals, penalties, and distributions.  Please understand these before opening your account.

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