In retirement, your paycheck might go away, but taxes won't.

Still your tax bill can be hard to predict. To have some control over how much you pay the government each year, you should have both taxable and non-taxable accounts from which to draw your retirement income.

Imagine it this way. Perhaps early in retirement you choose to continue to work part time and supplement your income from retirement savings accounts. The combined income may put you into a higher tax bracket. However, if you take some money from a Roth IRA that year, because withdrawals are nontaxable, it could help keep you in the lower bracket.

In later years if you're not working and hitting the next highest tax bracket isn't an issue, you can pull more money from a traditional IRA or 401(k) account.

This type of tax diversification is one of the primary reasons people choose to put some of their money in a Roth IRA, or convert to such an account.

"It affords you the flexibility when the time comes to make a withdrawal from an account that lines up best with your current taxes," said Chris McDermott, a senior vice president at Fidelity Investments.

Thanks to a new rule that goes into effect in January, more people can convert assets from a traditional IRA or a 401(k) account, at a former employer, into a Roth IRA.

As of Jan. 1, people making more than $100,000 may convert to a Roth IRA. Previously, only people who earned less than $100,000 could convert.

Here's a look at who should consider converting and why.

Q: What are the benefits of converting from a traditional IRA to a Roth IRA?

A: One advantage is that you'll be paying taxes on the account balance now, so that when you need to spend it once you're retired, you won't have to pay taxes. In addition, the money in the Roth IRA is growing tax-free. An investor converting a $100,000 account could see the account grow by $40,000 more in 20 years due to the tax advantage, compared with an unconverted traditional IRA, for example.

Another benefit of a Roth IRA is that you do not have to withdraw the money. Unlike a traditional IRA where you have to begin making withdrawals at age 70 1/2, you can let the Roth account continue to grow because you've already paid taxes. That can be critical now that people are living much longer due to health advances.

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Q: What are some of the things I should think about when considering whether to convert?

A: You should have enough money in other savings accounts to pay the income taxes you'll incur on the amount you want to convert. You don't want to pay the taxes out of your IRA because it reduces the amount that will go to work for you compounding tax free. One thing to consider is converting only the portion on which you can comfortably pay taxes.

Also, make sure the amount you're converting doesn't put you in a higher tax bracket. The amount you pull out of the IRA or 401(k) to convert will add to your taxable income for the year. To avoid that problem, consider converting some now and some in subsequent years. Another option is to take advantage of an IRS rule for 2010 that allows you to recognize the conversion income over the 2011 and 2012 tax years. This means that you can spread out the tax bill that arises from converting your account.

Also, keep in mind that you should only convert an account balance that you won't need to access for at least five years. Withdrawing the money from the Roth IRA within five years before you're 59 1/2 will result in a 10 percent penalty. Continued...