The Roth IRA offers a number of advantages over its traditional counterpart. These include:
- Tax-free distributions at retirement
- Ability to continue making contributions beyond age 70-1/2
- No required minimum distributions beginning in the year you turn 70-1/2
- Leaving assets to survivors that are free from income taxes
- For years before 2010, if your filing status is married filing separately, you don't qualify unless you lived apart from your spouse for the entire year.
- For years before 2010, if your modified adjusted gross income is greater than $100,000, you can't convert a traditional IRA to a Roth IRA.
- For years before 2008, direct conversions from an employer plan to a Roth IRA were not permitted. You can do that now, but in some situations it may be preferable to roll to a traditional IRA and then convert to a Roth IRA.
- If you inherited a traditional IRA from a person other than your spouse, you can't convert it to a Roth IRA.
- You can convert a traditional IRA to a Roth IRA even if you made a rollover within the previous 12 months.
- If you're otherwise eligible, you can convert part of a traditional IRA to a Roth IRA. But you can't convert only the nontaxable part.