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Am I Too Old for an IRA Conversion?

After age 70 or so, shifting a traditional IRA to a Roth may be more about the next generation.

Christine Benz: Hi, I'm Christine Benz for Can you be too old to convert a traditional IRA to a Roth? Joining me to discuss that topic is Ed Slott. He is an IRA expert, and he is also author of the newly revised Retirement Decisions Guide. Ed, thank you so much for being here.

Ed Slott: Great to be back here at Morningstar, live in Chicago.

Benz: Exactly. Thank you so much, Ed. I sometimes get the comment from investors, am I too old to convert this traditional IRA to Roth IRA? I want to tackle that question. But before we get into that, let's talk about why one would even consider such a conversion. What are the benefits?

Slott: All right. First, the idea of a Roth conversion is, you are moving money from a taxable IRA or even a 401(k) to a tax-free Roth, and there's a cost to that. You pay tax on the taxable amount converted. It adds to your income. But the benefit is, once it's in a Roth IRA, in retirement, once you have five years and 59 1/2 years old, that money grows tax-free forever. It's withdrawn tax-free anytime you want.