The Tax Benefits of a Roth IRAYou also have the option to roll your IRA, 401(k) or other qualified plan asset into a Trusteed Roth IRA.

The Main Advantages of a Trusteed Roth IRA include:

  • Federal (and possibly state) income tax-free accumulation of earnings
  • RMDs are not required during the original owner’s lifetime. This allows funds to remain in the account and accumulate income tax free earnings

Considerations for a Conversion:

You should always consult your tax advisor before converting funds to a Trusteed Roth IRA, and generally consider the following factors:


  • With a conversion to a Roth, you pay federal income taxes now on the conversion amount, but none on any future earnings, as long as when withdrawals are taken a five-year aging period has been met and you are age 59 ½ or over, disabled, or deceased.
  • Generally, conversion may not make sense if your time horizon is less than five years, because if you have not met the five-year aging requirement, any withdrawals are subject to a 10% penalty.
  • Tax Planning: If you think your tax rate will be higher in retirement than it is today, you may want to consider a Roth IRA conversion.
  • If your taxable income is lower this year than in a typical year, or if you have accounts that have lost value, you may want to consider a Roth IRA conversion because you may pay less in taxes.
  • If you plan to leave your assets to your beneficiaries, consider conversion because they may not have to pay federal taxes on that money.
  • If you expect the value of IRA assets to greatly appreciate in the future, you can potentially make tax-free withdrawals later.


  • You will have to pay income taxes now on any conversion, and you should analyze whether you have the resources to pay income taxes on the conversion from assets outside your IRA