Evaluation

• Evaluate all of your traditional IRAs and 401k plans. These plans have various investment options, as well as costs you must understand. Some plans, like 401k plans, have employer contributions added to the account. You'll want to know what percentage of the account is comprised of your own contributions and how much is comprised of your employer's.
  
  

Get Professional Advice

• Before you make any decisions, it's helpful to consult with a professional tax adviser as well as a retirement specialist. These individuals can help you figure out things like how much of your employer's contributions are vested. Vesting refers to the amount of time you must wait before you get to keep any money your employer has contributed to your plan. Many employers keep a vesting schedule and require you to work a certain number of years before you earn any benefits. Alternatively, employers will gradually give you a percentage of their contributions over a set number of years until you've earned all employer contributions.
  
  

Tax Considerations

• Paying taxes on the money you convert is part of the process. But, this has to make sense for you. If you expect your tax rate to increase as you get older, then a conversion now may make sense. If your tax rate remains the same or goes down, keeping the traditional retirement accounts may benefit you the most. If the tax rate is the same throughout your lifetime, then it doesn't matter when you pay this tax. You will end up with the same net income. If the tax rate is lower or higher, this is when the outcome changes.
  
  

Fill Out Paperwork

• Fill out paperwork to open your new Roth account. Do not submit this paperwork yet. You'll need to specify the amount of money you're transferring, the account, the account number of the old account as well as basic information like your name, Social Security number and contact information.
  
  

Strategic Conversion

• Transfer your money when it makes sense for you. You may want to convert your IRA in the beginning of the year and take advantage of the investment earnings you can make throughout the year. However, if this would be erased by the additional taxes you would pay, you may want to wait until the end of the year to convert your IRA over time to lessen the tax burden in each year.
  
  

Open New Account

• Submit your paperwork to your new brokerage firm when you are ready. Your new brokerage account should have all of the investments that you want to invest in. If it doesn't, then open your new Roth IRA with a firm that does. Your funds should take no more than four weeks to transfer into your new account. If your funds have not transferred after this time, then you should contact your existing brokerage firm and inquire about any transfer requests that are pending. You also should contact your new brokerage firm to ensure all paperwork was submitted properly.
  
  

Maintaining the Account

• You must keep your Roth IRA open for at least five years before withdrawing investment earnings tax-free. Likewise, you must be at least 59 1/2 before you make any withdrawal of earnings from the account. However, you do not need to wait five years or reach age 59 1/2 in order to withdraw principal contribution amounts. After the traditional IRA is converted to the Roth, any future contributions you make to the account may be withdrawn at any time.