Retirees often have money they've collected in traditional IRAs and 401(k)s throughout their career. But many miss out on a smart strategy to turn that money into a source of tax-free income for the rest of their lives.

In the following video from our Retirement Q&A series, Dan Caplinger, The Motley Fool's director of investment planning, answers a question from Fool reader Carl about whether you can take distributions from your 401(k) and roll them into a Roth IRA. Dan notes that Roth conversions can be a really smart way to take advantage of lower tax rates and also reduce the amount the IRS will require you to take from your 401(k) or traditional IRA once you turn age 70 1/2. But Dan points out that despite the added flexibility, you should be careful about the mechanics of the transaction, arranging to have transfers made directly from your employer to the financial institution holding your Roth IRA in order to avoid any complications. Nevertheless, for those in the right situation, the strategy can really help your retirement planning.

Have general questions about Social Security? Email them to, and they might be the subject of a future video!

Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.