ASK KIM
Convert to a Roth at Any Age
by Kimberly Lankford

Is there any way I can avoid the 50% penalty if I don't take my required IRA distributions after age 70½? Can a traditional IRA be rolled into a Roth at any time?

If you have a good excuse -- if illness prevented you from making the required withdrawal, say, or if you relied on bad advice about how much you were required to withdraw -- the IRS may waive the penalty.

Otherwise, once you reach age 70½, you have to withdraw a minimum amount from a traditional IRA each year. The amount is based on your life expectancy and is designed to get all the money out of the account -- with tax paid -- by the time you die.

Our Required Minimum Distribution calculator can help you figure out how much you'll need to withdraw.

You can convert a traditional IRA to a Roth at any age, as long as your adjusted gross income is less than $100,000 for the year. But there is a price. To do so, you have to pay tax on the amount rolled over -- except to the extent that you have made nondeductible contributions to the old IRA.

On the bright side, however, once your money is in a Roth, you never have to make another withdrawal, and all future earnings can be tax-free for you or your heirs. Inheritances from traditional IRAs are taxed in the beneficiary's top tax bracket.

For help making your decision about whether to make the switch, see our Should I Convert My IRA Into a Roth IRA? calculator.