Can a 75 year old taxpayer convert all of the funds in a traditional ira to a roth ira account?

There is no age limit or income requirement to convert a traditional IRA to a Roth one. You must pay taxes on the converted amount, although a portion of the conversion will be tax-free if you've made non-deductible contributions to your traditional IRA. The IRS considers that the first dollars withdrawn from an IRA after their 70th birthday and a half go to the RMD. Therefore, you must distribute the RMD before any amount in your IRA becomes a Roth.

Failure to do so could result in an excessive contribution to a Roth IRA. The IRS imposes a 6% penalty for each year this money remains in the Roth IRA. One advantage that Roth IRAs have over traditional IRAs is that you won't have to accept the required minimum distributions, something to consider if you want to leave the money to your heirs. Nor is there any age restriction if you are setting up a new IRA to which you will transfer or transfer assets from another IRA or from an eligible retirement plan, such as an employer-sponsored plan, such as a 401 (k).

However, you can still contribute to a Roth IRA and make cumulative contributions to a Roth or traditional IRA, regardless of your age. The amount you convert from a traditional IRA to a Roth IRA is considered income, as are all taxable distributions from qualified accounts before taxes. Since untaxable withdrawals from a Roth IRA are not part of your MAGI, converting to a Roth IRA could allow you to limit your exposure to the Medicare surcharge in the future. When you convert a traditional IRA to a Roth IRA, you'll owe taxes on any money in the traditional IRA that was taxed when you withdrew it.

IRA contribution calculator Answer a few questions to find out if a Roth or traditional IRA might be right for you. However, people in that situation can still convert traditional IRAs into Roth IRAs, the strategy known as a clandestine Roth IRA. Converting a traditional IRA or funds from an SEP IRA or SIMPLE plan to a Roth IRA may be a good option if you expect to be in a higher tax bracket in your retirement years. Retirees who don't need money from their IRA to maintain their lifestyle may want to consider converting their IRA (or part of it) to a Roth one to avoid RMDs.

According to the IRS, you can only make a transfer in any 12-month period from a traditional IRA to another traditional IRA.