Rolling a traditional 401(k) into a Roth IRA triggers immediate taxes on the full conversion amount. Roth IRAs offer tax-free growth and withdrawals, with no required minimum distributions in the owner’s lifetime. Spreading conversions across multiple years can prevent jumping into higher tax brackets.

Leaving funds in an old 401(k) can lead to problems, like forgetting about the account or unforeseen changes by the previous employer. Rolling the money into a new retirement plan that you actively manage is usually the safer choice.

Consider rolling funds from a traditional 401(k) or IRA into a Roth IRA for long-term tax benefits. However, be prepared for a tax bill as the amount rolled over is treated as taxable income in the year of conversion. Consult with a tax professional or financial advisor before proceeding.

With the right planning, rolling an old 401(k) into a Roth IRA can be a strong long-term move. The tax-free growth, withdrawals, and lack of required distributions make the Roth structure appealing for many savers. Carefully consider the short-term tax cost against the long-term benefit.

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Read more at Yahoo Finance: A Roth IRA Conversion Sounds Smart, but Is It Right for Your 401(k)?