Is there an upfront charge for an IRA to Roth IRA conversion? Robert 'Bob' Powell answers this question as part of Decoding Retirement's special segment, Ask Bob.

Powell was joined by award-winning author and retirement expert, Anne Lester, on the debut episode of Decoding Retirement to discuss Roth IRA conversions and more.

Question:

Is there an upfront charge, besides the income tax or income related monthly adjustment amount (IRMAA), for an IRA to Roth IRA conversion?

Answer:

There is no charge for a Roth conversion. However, the amount converted from the traditional IRA to the Roth IRA is subject to ordinary income tax in the year of the conversion. This includes any pre-tax contributions and earnings that were in the traditional IRA. There may also be what Andy Ives, an IRA expert with Ed Slott & Co., calls 'stealth taxes' due.

For instance, Medicare beneficiaries may have to pay what’s called an income related month adjustment amount or IRMAA. IRMAA is an extra charge added to the premiums for Medicare Part B (medical insurance) and Part D (prescription drug coverage) for beneficiaries with higher incomes. Other individuals who are enrolled in an affordable care act health insurance may learn that their advanced premium tax credit is reduced or eliminated because the Roth IRA conversion increases your modified adjusted gross income.And lastly, there’s a chance that a Roth IRA conversion could push you into a higher tax bracket.

Retirement planning doesn’t mean locking up your money for a rainy day and forgetting about it. Planning your future means reacting to events today. Decoding Retirement gives you the tools to navigate the years ahead, and take action now!

Yahoo Finance's Decoding Retirement is hosted by Robert Powell, and produced by Zach Faulds and Alexander Frangeskides.

Find more episodes of Decoding Retirement at https://www.cerveza-artesanal.com/videos/series/decoding-retirement.

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Editor's note: This post was written by Zach Faulds.