While payouts from your bond fund may be called "dividends, " they're really interest and don't qualify for the 15% rate.

FORBES: How to adjust your investing, loan and AMT strategies.

For those who do, it usually makes sense to convert unless your conversion tax rate is much higher than your rate on future payouts, which is rarely the case.

FORBES: Roth IRA or Regular IRA?

Whatever your age, you must take annual payouts from a pre-tax IRA inherited from a parent or someone other than a spouse.

FORBES: Take Money Out Of Your IRA In 2010, Or Else

After you deal with payouts, review the beneficiary form your IRA sponsor has on file and consider changing it.

FORBES: IRA Tips and Traps

With a traditional IRA you have to take mandatory payouts starting at age 70.5, while you can keep the money in a Roth as long as you like, even leaving it to your heirs who get income-tax-free payouts.

FORBES: Magazine Article

That can be most severe if your broker doesn't offer free reinvestment of the monthly dividend payouts, as done by open-end funds.

FORBES: Magazine Article

It helps your case if the trust document gives the trustee broad discretion to make payouts or has specific language addressing distributions to reduce or avoid taxes.

FORBES: Payday for Trust Babies

Annualized, those payouts come to 11.6% and 12.8% of your starting principal.

FORBES: A 10% Annual Payout For Retirees