Is converting a traditional IRA to a Roth IRA a good idea for you? At first glance, a Roth IRA may not seem worthwhile. You cannot deduct Roth IRA contributions in the current year, while you can make tax-deductible contributions to a traditional IRA if you meet the income requirements.

The advantages of a Roth IRA come later. When you take withdrawals from a Roth IRA, you don’t have to pay taxes, as long as the account has been open for more than five years and you’re age 59 1/2 or older. In contrast, withdrawals from a traditional IRA are taxable.

So which account is better for you? A deciding factor is your tax rate. If you expect to be in the same or a higher tax bracket at the time you begin taking withdrawals, a Roth IRA is generally advantageous.

December 31 is the deadline to convert a traditional IRA into a Roth IRA for this year. You have to pay income tax on the amount placed in the Roth account but you escape taxes on future earnings that accumulate.

Bonus: If the value of your IRA is currently down due to the stock market, the tax cost of converting your traditional IRA to a Roth IRA will be lower too. What if you converted to a Roth IRA earlier this year when your IRA was worth much more? You can change your mind by “recharacterizing” the conversion by a certain deadline. Then, you’ll have a regular IRA again. (You can “reconvert” to a Roth IRA in the future, provided you follow certain rules. )

Remember that converting an IRA results in an increase in your adjusted gross income, which can in turn make you ineligible for certain tax breaks. A boost in your income can also make more of your Social Security benefits taxable.