I've read some articles on converting a Rollover IRA to a Roth IRA on Motley Fool, but I'm still a little confused.

Here's my scenario:

I'm in my mid 20s. I had a 401k rollover into an IRA because I left my old company. There's only around $2600 in the account.

I have a Roth IRA that I contributed $4000 to.

Questions:

Is it wise for me to convert the funds in the Rollover IRA to the Roth IRA?
I feel like I should consolidate them because I will not be making contributions to the Rollover IRA. I make all my contributions to the Roth IRA because my current employer does not have a 401k plan that matches.

If so, would I be able to withdraw, say $1000 for emergency purposes, from the Roth IRA without penalty? My initial contributions to the Roth IRA would take precedence in the withdrawal-penalty hierarchy, correct?

As long as I don't withdraw more than $4000 from the Roth IRA, I will not have to pay a penalty? even though I converted my Rollover IRA?

Thanks!

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crice said:I'm in my mid 20s. I had a 401k rollover into an IRA because I left my old company. There's only around $2600 in the account.

I have a Roth IRA that I contributed $4000 to.
...
As long as I don't withdraw more than $4000 from the Roth IRA, I will not have to pay a penalty? even though I converted my Rollover IRA?Correct.