An article on the website The Motley Fool offers three reasons to use or convert to a Roth IRA.
The first is the ability to get the money whenever you want, without taxes or penalties. But that’s a terrible reason: to be able to spend your retirement money whenever you want. Maybe it shouldn’t be sow easy to raid the cookie jar.
The second: there are no required minimum distributions during the owner’s lifetime. That’s true, but it’s of value only for those people who will not need the IRA money during their retirement years. Most of us will, so the need to take out a minimum each year isn’t that much of a burden, especially when compared to the upfront tax cost of conversion.
Third: you can leave your heirs a tax-free inheritance. Also true, but is that a reason to convert to a Roth IRA and pay taxes now? As the writer suggests, not if your heirs will be in a lower tax bracket than the IRA owner. How can anyone possibly know that?
Deciding whether conversion to a Roth IRA makes sense is a decision unique to every individual. If you believe you will never need a chunk of your traditional IRA money during retirement, conversion to a Roth IRA might make sense. But it’s a decision to make after considering many things about the owner, the owner’s spouse and the owner’s children and grandchildren. You can’t make decisions based on generalized articles you read or talking heads on television. And, as if you didn’t know it, avoid taking tax advice from people who make money dependent on your choice.