What is Roth Conversion?
Definition A Roth conversion moves money from a pre-tax retirement account, such as a traditional IRA or 401(k), into a Roth account. You pay income tax on the converted amount now in exchange for tax-free growth and qualified withdrawals later. Conversions are often done in lower-income years to control the tax cost.
Converting during low-income years or market dips can lock in tax at favorable rates and reduce future required distributions, a key retirement-planning strategy.