Hello and welcome to Moneygirls quick and dirty tips for a richer life.

Today's topic, what to do if you want to convert to a Roth IRA, but can't.

A Roth IRA is a great way to save for retirement if you're eligible to contribute.

With a Roth IRA, you contribute after-tax money, but your earnings get to grow free of federal tax.

And you pay no federal tax on distributions if you've had the Roth for five years or longer and are at least age 59.

Because a Roth provides retirement income that's free of federal tax, it's a really smart way to invest for retirement.

If you're single, your modified adjusted gross income must be under $99,000 to

contribute to a Roth in 2007. If it's between 99,000 and 114,000, you can make a partial

contribution. And if you're married filing jointly, you can contribute to a Roth if your modified adjusted gross income is less than

$156,000.

For incomes between $156,000 and $166,000, you can make a partial contribution as well.

So how do you decide if a Roth is right for you?

If you're younger or think your tax rate will be the same or higher when you retire than it is today,

a Roth is likely to be your best bet.

You have to pay tax on your contributions today, but your earnings grow tax-free, which can really help increase the future value of your retirement investments.

If you've been contributing to another type of IRA or have rolled over your 401k from a previous employer into a roll over IRA,

it's possible to convert it to a Roth IRA.

But if you convert to a Roth, you'll need to add the taxable amount you're converting to your income on your tax return and pay income tax on it, which can mean a bigger than usual tax bill.

After you've paid the tax, though, the pain is over and your earnings will

grow tax-free. If you're thinking of converting to a Roth, be sure to estimate the

tax bill first. If it's more than you're prepared to pay, you can consider converting just a portion of your existing IRA to a Roth to keep the tax bill manageable.

To avoid penalties, don't pay the tax bill with IRA money.

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