When is the right time to convert a traditional IRA to a Roth IRA?

You will have to pay tax on the converted funds, but once the money is in the Roth, future earnings are tax-free.  Present and future tax rates are key in your decision on whether a Roth conversion make sense.  If you expect the tax rate you will pay in retirement to be the same as or higher than the rate on the conversion, then switching to a Roth can pay off taxwise.  If your tax rate in retirement will be lower, then tax-free Roth distributions later on could turn out to be less advantageous.

You don’t need to convert the entire amount to a Roth in one swoop.  You can transfer the money in increments over time, and space out the tax hit.

*Kiplinger Tax Letter