How do I Rollover an IRA to a Roth IRA?

Accomplishing a rollover from an IRA to a Roth Ira isn’t usually difficult. You may start out by considering your options and making sure a Roth IRA is a good choice for you. You may then request a trustee-to-trustee transfer to have the organizations that hold your original IRA and your new account handle the transfer of funds. Alternatively, you may request a distribution check to rollover an IRA to a Roth IRA yourself. Once you’ve decided which option you’d like to choose, you will usually have to complete and sign required paperwork to start the rollover process.

The first step when you want to rollover an IRA to a Roth IRA is making sure this financial move will be right for you. You may consider a range of factors as you decide, but one of them is likely to be taxation. If you keep your money in an IRA, your contributions may be tax deductible, but your contributions to a Roth IRA won't be tax deductible. If you're willing to make contributions that aren’t tax deductible now in exchange for avoiding taxes when you take distributions, a Roth IRA may be a good choice.

Once you are sure you want to rollover an IRA to a Roth IRA, you may do well to have the organizations involved handle the rollover through a process referred to as a trustee-to-trustee transfer. In such a case, your money is moved from your existing IRA into a new Roth IRA with your permission. You never receive the money in your hands, so there is less chance of delays in moving the money. This is important, as a rollover that is not completed within 60 days usually counts as a distribution. In such a case, you may have to pay taxes and penalties.

If you do choose to receive the money from an IRA because you are planning to roll it over to a Roth IRA, you may still avoid unnecessary delays. In such a case, you may start by opening the Roth IRA before you request the funds from your IRA. This way, the account is ready to receive the funds. Once you receive the check from your IRA, you can then take it for immediate deposit into your new Roth IRA.

To rollover an IRA to a Roth IRA, you will usually have to contact your plan’s administrator. You will typically have to complete and sign forms to initiate and complete this type of rollover. Once the required paperwork is complete, the organization that holds your account will transfer the funds for you or provide your funds in the form of a check.