When Is the Best Time To Do a Roth Conversion?
Roth conversions aren't nearly as scary as they may sound. They can also be one of the more valuable financial planning tools available to everyday investors, especially if used properly.
Here, we'll go through what a Roth conversion is, why the end of the year is an optimal time to think about Roth conversions, and, finally, how to successfully complete one.
In the most simple terms, a Roth conversion is the movement of funds from a pre-tax retirement account (like a 401(k) or Traditional IRA) to, most commonly, a Roth IRA. During the conversion, you explicitly move funds from pre-tax status to post-tax status; while this will set off some alarms in that tax will be charged on any amount converted, this is done (hopefully) voluntarily and purposefully.
Source Fool.com
