Converting your traditional IRA to a Roth IRA

Learn about the potential benefits of a Roth IRA and how to take advantage of them if you have assets in a traditional IRA

It's generally a good idea for most investors to consider including a Roth IRA in their overall retirement planning. Investments in your Roth IRA have the potential to grow tax-free, which may help you save more over time. Plus, Roth IRAs don't have required minimum distributions during the lifetime of the original owner, and Roth IRA assets may pass to your heirs tax-free.

Determining if a Roth conversion is right for you

Ready to get started?

Roth Conversion Checklists
Follow these simple steps to convert your Traditional IRA or old 401(k) to a Roth IRA.

Anyone can convert their eligible IRA assets to a Roth IRA regardless of income or marital status. Prior to 2010, only those account owners who had a modified adjusted gross income below $100,000 were eligible to convert.

Despite its advantages, Roth may not be the preferred option for all investors. There are three important factors—taxes, time, and costs—that you should consider before you decide if conversion is right for you. Fidelity's Roth IRA FAQs can help you weigh these factors and get answers to important questions you may have. Be sure to consult with your tax advisor with regard to your personal circumstances.

To learn more about the differences between Roth and traditional IRAs and get a quick overview of eligibility and features, use the Compare Roth and Traditional IRAs.

It's also important to note that if you are required to take a required minimum distribution (RMD) in the year you convert to a Roth IRA, you must do so before converting.

Considerations for owners of Roth IRAs

Distributions from a Roth IRA are qualified, and thus tax-free and penalty-free, provided that the 5-year aging requirement has been satisfied and at least one of the following conditions has been met:

  • You reach age 59½
  • You pass away
  • You are disabled
  • You make a qualified first-time home purchase

All other distributions are non-qualified. Non-qualified distributions of converted balances are not taxed again (since they were taxed when converted), but they may be subjected to a 10% penalty unless it's been at least five years since the beginning of the year of your conversion, you've reached age 59½, or one of the other exceptions applies.

RMDs are not required during the lifetime of the original owner of a Roth IRA. RMD amounts are not eligible to be converted to a Roth IRA.

If you qualify, you can do an eligible rollover distribution from your old 401(k) directly to a Roth IRA. You'll owe taxes on the amount of pretax assets you roll over.

Note also, if you have assets in a Designated Roth Account (i.e., Roth 401(k)) and would like to roll these to an IRA, the assets must be rolled into a Roth IRA.

As with Traditional IRA conversions to Roth IRAs, if you are required to take an RMD in the year you roll over into an IRA, you must take it before rolling over your assets.

Learn more about your rollover options

The Tax Cuts and Jobs Act eliminated this strategy for conversions processed in the 2018 tax year and beyond.

Consult a tax professional about your particular situation.

Next steps

Calculator

IRA Contribution Calculator Answer a few questions in the IRA Contribution Calculator to find out whether a Roth or traditional IRA might be right for you, based on how much you’re eligible to contribute and how much you might be able to deduct on your taxes.

Roth IRA Conversion Checklists Get step-by-step instructions on how to convert to a Roth IRA from a Fidelity or non-Fidelity Traditional IRA or 401(k).