The 401(k) conversions now allowed under federal law might make sense for investors who want to leave tax-free inheritances, regardless of the up-front costs, experts say. Conversions to a Roth 401(k) also might make sense for investors who expect to retire in a higher tax bracket or who have tax deductions and credits that would offset the taxes due as a result of the conversion. Consultant Jeffrey Levine says it's rarely wise to convert if an investor has to tap his or her retirement savings accounts to pay the taxes.

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