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Thinking about converting a 401K to an IRA? This may provide additional investment flexibility, reduced costs, and tax planning benefits in the long term. Many job changers and retirees are now converting 401k to IRA accounts to gain flexibility in retirement income planning and to ease the burden of retirement savings. The primary benefit of a Roth IRA is that the tax-free qualified distributions are allowed in retirement. There are two things to consider: Some of the pre-tax 401(k) money may be considered income at the time of conversion, but after the conversion, the long-term advantages for original account holders could include the potential for tax-free growth and no mandatory distributions. A direct rollover can be a good way to minimize penalties and maximize your tax-deferred retirement savings. Be sure to consider your tax bracket, retirement plan, and future income needs carefully before you move.