So, if you have $8,000 in a traditional IRA

So, if you have $8,000 in a traditional IRA and want to convert it to a Roth IRA, you can do so, but you’ll have to pay income taxes on that $8,000. However, after that point, it’s Roth IRA money, which means that (a) the $8,000 is treated as a contribution so you can withdraw it when you want and (b) once you’ve had the account for five years and you’re 59 1/2 or older, you pay no taxes on the earnings on that $8,000 when you withdraw it. So, you pay $2,000 or $3,000 or so in income taxes this year, but after that, it grows for the rest of your life without ever having to be taxed.