NEW YORK (CNN) -- Did you know you can now roll over your traditional IRA or old 401(k) into a Roth IRA no matter what your income is -- thanks to a new law that took effect this year? So far, not many people know this, according to a new report out by Fidelity Investments.
In a traditional IRA you contribute money to your retirement that you don't pay taxes on. It's a tax deferred account. But once you retire, you'll owe taxes on what you take out.
A Roth IRA is the opposite. You pay taxes on the money you put in, but you won't owe anything when you take it out. A lot of people like the Roth option because your money grows tax free, you don't have to start taking distributions at a particular age (like you do with a traditional IRA), and you can pass it along to your heirs.
Up until now, this type of conversion to a Roth IRA was available only to people who made less than $100,000 a year. But for this year and going forward, anyone can do it.
You benefit from converting to a Roth IRA if your tax bracket is likely to be higher when you take out the money, says Chris McDermott of Fidelity Investments.
The younger you are the better a Roth conversion looks. That's because your money has more time to grow tax free.
Of course, you also have to be able to pay taxes now on what you're converting.
That's a sticking point for a lot of investors since that tax hit can be quite expensive, says Doug Flynn of Flynn-Zito Capital Management.
If you're in the 28% tax bracket and you want to convert $100,000, that's $28,000 dollars you have to pay up front. Although, this year you can split that amount up over two years.
There are cases where converting is not the best move. For example, if your tax bracket will be lower at retirement, a Roth conversion will not be ideal.
And if you need the money in the next five years, don't do the conversion.
Also, if you'll be applying for financial aid, you want to think twice about the conversion. That's because when you have a Roth IRA, your income looks bigger, so you may not qualify for as many government loans. And, of course, if you can't pay for the conversion out of a bank account or an investment account, it's not worth making the switch.
Crunch the numbers at Fidelity.Com/rothevaluator.
Talkback: Have you rolled over a retirement account? 
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