Conversion (Roth)
Moving money from a traditional account to a Roth and paying tax on it now.
A definition says what a thing is; it never says whether it fits you. The guides explain how it works and name the professional who confirms it for a particular person. The No Advice Disclosure.
Words beside it
- Backdoor Roth
Contributing to a traditional IRA and converting it to a Roth, used by people over the Roth income limit. Watch the pro rata rule.
- conversion
A conversion is when you move money from one type of retirement account to a different type, like switching funds from a traditional IRA to a Roth IRA. This can trigger taxes depending on how the money was originally saved.
- Mega backdoor Roth
After tax 401(k) contributions converted to Roth, where the plan allows it. Large room, rare plans.
- Roth 401(k)
The Roth version inside a workplace plan; no income limit.
- Roth IRA
An account you fund with taxed money and withdraw from tax free later.
- Tax conversion
A tax conversion is when you move money from one type of retirement account to another type, which can trigger a tax bill in the year you do it because the rules between the two accounts are different.
Ask about Conversion (Roth)
A model reads this page and answers from it. It will say when the answer is not on the page. Education, not personalized advice.