Q. I don’t understand the hoopla related to the ability to convert conventional IRAs to Roth IRAs— even with the bonus of deferring taxes owed for the next few years. My tax rate will likely be lower in retirement due to lower income (even if federal taxes continue to be raised, I believe my reduction in income will at least keep the rate constant).

And if that assumption is incorrect, the future value of a dollar I would have to pay in taxes will undoubtedly be lower than the value of a dollar today. It seems to me this would more than make up for any tax increase we might reasonably expect.

So why would I want to pay taxes with 2010 dollars when I could pay them with future dollars? Based on an inflation rate of 3 percent the value of $1,000 is going to be reduced to about $744 in 10 years. Am I missing something here? Unless you are going to retire very soon, this just does not seem to make sense to me. —R.G., from Austin, TX

A. Roth conversion definitely isn't for everyone, particularly those who expect to be in a lower tax bracket when they are making their retirement plan withdrawals. That's why you haven't seen much drum beating for conversion in this column. Some people, however, face a nasty retirement surprise that may be avoided (under current, but ephemeral, tax law) by converting.

If their IRA and other income trigger the taxation of Social Security benefits, they may not only need to pay taxes on their Social Security income but their taxable income may rise from the 15 percent tax rate to the 25 percent tax rate. Since withdrawals from Roth IRA accounts are currently not included in the calculation of taxable income, Roth conversion may help some people avoid this unhappy event.

The operative word here is "may." While it is possible to reduce income taxes substantially, it may not always put more spending money in your pocket.

You can understand this by taking an extreme case, a couple with $1 million in IRA assets and $40,000 in Social Security benefits. If they take $55,000 a year from their IRA each year their cash income will be $95,000. About $29,400 of their Social Security income will become taxable, so their adjusted gross income will be about $84,400. Their federal income tax bill will be about $8,800. They will have $86,200 to spend— after income taxes.

If the same couple converts their IRA into a Roth and pays 33 percent in average taxes, they will have $670,000 left to earn income and all of it will be tax-free. At 5.5 percent, that would be $36,850 and none of their $40,000 Social Security income would become taxable.

So they would pay $0 in income taxes. They cut their tax bill by a whopping $8,800. Unfortunately, they also cut their after-tax income from $86,200 down to $76,850— so there was no benefit for them. This kind of gambit is usually called “cutting off your nose to spite your face.”

That's why no one should convert without making very careful calculations first.

Q. My husband and I are in our 80's. Our affairs are in order but I need to know more if I am left to make financial decisions. Is there a book you would recommend? —Y.M., by email from Austin, TX

A. Today, you can buy shares in a single low-cost and broadly diversified mutual fund that will handle all your investment needs. It will be simple to own and easy to live with. I have, for instance, suggested funds like Vanguard Wellington and Vanguard Wellesley many times. The problem you face is the multitude of highly marketed investment products that are unlikely to meet your needs, but very likely to help the salesperson make his Mercedes payment.

You can arm yourself against these claims— often sold through offers of a "free senior lunch"— by reading "The Only Guide to Alternative Investments You'll Ever Need" (Bloomberg, $26). Written by Larry E. Swedroe and Jared Kizer, it takes you chapter by chapter through "the good, the flawed, the bad and the ugly" of investments. You can read my column about the book at: http://assetbuilder.com/RJZVGS.