Contributing to a Roth IRA can be a good way to save for retirement and diversify your taxes.
Funding a Roth IRA to a substantial amount can be tricky, though, since investors have a $6,000 maximum on contributions in both 2019 and 2020. (People over age 50 can contribute an additional $1,000.)
One work-around is to convert your traditional IRA into a Roth IRA.
Most people end up with more tax-deferred money inside a 401(k) or other employer-sponsored retirement account, which allows for higher annual contributions. Eventually, many people roll their 401(k)s into IRAs to continue the tax-deferred nature of the savings and investments. Converting a traditional IRA – which tend to have more money in them than Roth IRAs – into a Roth IRA can be a powerful tool to boost your retirement planning.