Are you retired? If so, you may think that a Roth IRA is not for you. You may think that Roth IRAs are for younger people. Before deciding that a Roth IRA will not benefit you as a retiree, here are 10 facts that you will want to know. 

1. If you are still working, you can still make contributions to your Roth IRA. There are no age limits for Roth IRA contributions but there are income limits that are indexed each year for inflation. Go to www.IRAhelp.com/2015 to find the limits for the current year. 

2. You are not required to have earned income to convert your traditional IRA to a Roth IRA. You can still convert when you are retired. 

3. Factors favoring converting for retirees include: having nonretirement account funds to pay the taxes, not needing the converted money for immediate living expenses, and a willingness to pay taxes on the IRA funds so beneficiaries won’t have to pay them in the future. 

4. You must take your RMD for the year before converting any or all of the remaining amount of your traditional IRA. Your RMD is not eligible to be converted but once the conversion is done you will never need to take an RMD again because Roth IRA owners are not required to take RMDs during their lifetime. 

5. Converting to a Roth IRA will increase your income for the year of the conversion. This may impact deductions, credits, exemptions, phase-outs, AMT, the taxation of your Social Security benefits and Medicare Part B and Part D premiums; in other words, anything on your tax return impacted by an increase in your income. Those Medicare premiums are generally based on your income from two years prior, so you may not see the full cost of the conversion show up for several years. 

6. Your Roth IRA contributions can always be distributed without tax or penalty. There is no waiting period. 

7. Converted funds can always be distributed from your Roth IRA tax-free. Distributions of converted funds are not taxable because the taxes were paid when you converted. Distributions of converted funds are also not subject to the 10% early distribution penalty if you are over age 59 ½. If you are under age 59 ½, you need to wait five years after the conversion to access the funds without penalty unless an exception applies. 

8. Even if you are over age 59 ½, you must wait five tax years from the year of your first Roth IRA conversion or tax-year Roth IRA contribution to any Roth IRA for a distribution of earnings from any Roth IRA to be tax-free. The good news is that earnings are considered the last funds distributed from your Roth IRA(s) and will never be subject to the 10% early distribution penalty if you are over age 59 ½. 

9. Roth IRA distributions to your beneficiaries are generally: income tax-free, in contrast to traditional IRA distributions to beneficiaries, which are generally taxable. 

10. If your beneficiary takes a distribution from the inherited Roth IRA after five tax years from the year of your first Roth IRA conversion or tax-year Roth IRA contribution to any Roth IRA, the distribution will be completely income tax and penalty-free. Is a Roth IRA right for you as a retiree? 

These 10 facts are just a starting point. If you are interested in learning more, the next step is to sit down with a financial advisor who has expertise with these accounts and knows the details of your financial situation. 

Together you can decide whether a Roth IRA is a good strategy for you