401(k)s and IRAs: Grow your money, shrink your taxes

Investors can convert a traditional IRA to a Roth IRA at any time. And sometimes it can be a money-wise move. But there are a few things you should know. You'll owe income tax on the money you convert, but in return you can get at your savings tax-free in retirement.

Make the switch if...
• You want to hedge against the possibility that you'll face a higher tax rate in retirement.
• You can pay the conversion tax with money you have outside the traditional IRA.
• You want access to tax-free income after you retire, which gives you more flexibility to manage your tax bill.

You're eligible if....
• Your modified AGI is not above $100,000, although this requirement will be dropped in 2010, opening conversions to everyone.