3 Reasons to Convert an IRA to a Roth

IRAs and 401(k)s are a tremendous way to grow your nest egg for retirement. You avoid paying taxes on the money you put into these accounts during the time you are working and are most likely in a higher income tax bracket. The idea is to defer paying taxes until you are in retirement, no longer earning an income, and potentially in a lower tax bracket. The tax advantages allow you to turbocharge your growth.

This strategy works beautifully when you actually are in a lower tax bracket in retirement, however, sometimes this is not the case. What if you will actually be in a higher tax bracket when you begin pulling money from your IRA in retirement?

There are three compelling reasons why your tax rates may very well be higher for you in the future, and if that is the case, you'll want to consider a Roth IRA conversion to lower your tax hit. When you convert money in your IRA or 401(k), which has never been taxed, to a Roth IRA or a Roth