If you have money in an Individual Retirement Account, or an IRA rollover account, you'll be faced with a big financial decision next year. Should you convert your current IRA, on which you'll pay taxes when you withdraw the money, into a tax-free Roth IRA?

Conversions have always been available to people with income under $100,000. But in 2010 and beyond, there will be no income limit for conversions from traditional to Roth IRAs. Anyone with an IRA, or an IRA rollover account that might have resulted from leaving a previous employer's 401(k) plan, will be eligible to convert all, or part, of the IRA to a Roth IRA.

In 2010 and beyond, there will be no income limit for conversions from traditional to Roth IRAs.

Remember, withdrawals from a traditional IRA are taxable as ordinary income at the time you take the money. But, since all withdrawals from a Roth IRA, whether contributions or investment gains, are taken out tax-free, this conversion proposition is very attractive at first glance.

But there's one big catch: You have to pay income taxes now on the amount you convert to the Roth.

That brings some important financial calculations. But some even more important issues must be considered first.

Before calculating a Roth conversion, consider your answers to two basic questions:

No. 1: Do you think personal income tax rates will be higher or lower over the next 10, 15, 20 years?

Most people would guess that tax rates, even on retirees with lower income, will be higher in the future. The government-spending binge has to be paid for, and it will take more than just increased taxes on "rich" people. Remember, when John F. Kennedy became president in 1961, the top personal tax rate was 91 percent.

No. 2 (This is a bit more difficult): Do you think the government will keep its promise to allow tax-free withdrawals from Roth IRAs over the next 10, 15, 20 years?

That may make you think twice. Tax laws have been changed before -- in the name of "fairness." Just ask seniors who counted on receiving tax-free income from municipal bonds how they feel about having that income added back to their "modified adjusted gross income" to determine how much of their Social Security check is subject to taxes! Or ask seniors with higher incomes how they feel about paying twice the Medicare premiums -- even though high earners paid more in Medicare taxes over the years.

So do you really think that if you convert to a Roth IRA now, the government will keep its promise to let you withdraw your money completely tax-free in the future?

If you're willing to trade paying taxes today for future tax-free promises, here are the issues you'll have to consider. (By the way, the most detailed presentation of these tradeoffs can be found online at Schwab.com.) Continued...