Benefits of a Roth IRA Conversion
Contributions to a Roth IRA have the potential to grow tax free, and you may not have to pay any income tax when you withdraw your savings in retirement.2
  • The income restriction for IRA conversions was lifted indefinitely, making everyone eligible to convert from a Traditional IRA to a Roth IRA regardless of income level.
Is a Roth IRA Conversion right for you?
If you answer "yes" to many of these questions, you may want to consider a Roth IRA conversion.
  • Do you have assets invested in Traditional IRAs or employer-sponsored retirement plans?
  • Do you have funds outside of your IRA to pay the income taxes that a Roth IRA Conversion will trigger?
  • Do you want to increase your tax-free savings as part of your overall portfolio strategy?
  • Do you anticipate that your tax bracket or tax rate will be higher in retirement?
  • Do you want to reduce the taxable value of your estate?
Important considerations
Converting to a Roth IRA may not be ideal for everyone. There are tax implications that you must consider, so you should speak with your tax advisor3 before making any decisions.
What types of accounts are eligible for conversion?
  • Traditional IRA
  • Rollover IRA
  • SEP IRA
  • SIMPLE IRA (after held for 2 years)
  • Assets in tax-qualified retirement plans, such as 401(k), 403(b), 457(b), profit sharing and money purchase plans
How to convert to a Roth IRA
The process will vary depending on the type of account you are converting.
  • If you already have a Traditional IRA at Bank of America or Merrill Edge®, a representative will help you open a Roth IRA and fill out the conversion form.
  • If you have an IRA outside of Bank of America or Merrill Edge®, a representative will help you transfer your Traditional IRA and assist you with the Roth IRA Conversion.
  • If you have assets in a 401(k) from a former employer, a representative will help you transfer your assets from your 401(k) and assist with the Roth IRA Conversion.
If you are at least age 70½, federal tax law requires the owner of a Traditional IRA or employer-sponsored retirement plan such as a 401(k) to begin taking a Required Minimum Distribution (RMD) each year. In any year that an RMD is due, federal tax law considers the first distribution to contain the RMD. A Roth IRA conversion requires you to take the RMD before converting your account. Ineligible funds converted to a Roth IRA will be subject to an excise tax and will be required to be removed as excess. You should review any planned financial transactions or arrangements that may have tax or accounting implications with your personal professional advisors.
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