Convert an account to a Roth IRA

Want potential tax-free growth for retirement? If you have a traditional IRA or old 401(k), you have the option to turn it into a Roth IRA. We can help.

What's a Roth IRA conversion?

If you own a traditional IRA or other non-Roth IRA, or have an old workplace retirement plan such as a 401(k), 403(b), or 457(b), you can pay taxes on your account to move your savings to a Roth IRA, letting you enjoy the potential for future tax-free growth.

5 questions to see if converting makes sense

For many individuals, converting to a Roth IRA may make sense. However, you should consult with a tax advisor and consider the following factors prior to making your decision:

  • 1. Can you pay the taxes?
    This is the big question for most folks. The amount you choose to convert (you don’t have to convert the entire account) will be taxed as ordinary income in the year you convert. So you’ll need to have enough cash saved to pay the taxes on the amount you convert. Keep in mind: This additional income could also push you into a higher marginal federal income tax bracket.

    To find a comfortable amount to convert, try our Roth conversion calculator.
  • 2. Is time on your side?
    The relative benefits of conversion will generally increase the longer your money remains in the Roth IRA. Specifically, if you need that money in less than 5 years, converting is generally not a good idea. If you’re age 50 or older, learn more in our Viewpoints article on Roth conversions specifically addressing your considerations.

    The key to remember with a Roth: Your money must stay in the Roth IRA for 5 years before your withdrawals of earnings can become tax-free and penalty-free in retirement. Withdrawals of your contributions can be made at any time, tax-free and penalty-free.
  • 3. Will you earn the same or more in retirement?
    If you think your tax rate will be the same or higher in retirement, converting now could make sense. Why? Because Roth IRAs do not have required minimum distributions (RMDs) during the lifetime of the original owner. That means you could convert now and just keep giving the money a chance to grow, untaxed, without withdrawing. (Keep in mind: If you are required to take an RMD in the year you convert to a Roth IRA, you must do so before converting.)
  • 4. Do any of these other scenarios apply to you?
    • You think the value of your IRA investments is hitting a low point.
    • You have other losses or deductions to offset the tax due on the conversion.
    • You are moving to a state with higher income taxes.
    If so, a conversion may also make sense for you.
  • 5. What do you need to know before you convert?
    • Submission deadline at Fidelity: 4 p.m. ET on December 31 for a given tax year. If that’s on a weekend, the deadline is 4 p.m. ET on the last business day of the year.
    • No do-overs: Once your conversion’s complete, it can’t be reversed.
    • Tax bill: The amount you convert is taxable in the year you convert. So you need to plan for taxes.
    • Selling investments: Most traditional IRA investments can convert to a Roth IRA without being sold. Most 401(k)s convert in cash.
    • Value of the conversion: You’ll receive the closing market price on the day your conversion is processed.
    • Required minimum distribution (RMD): You must take any necessary RMD from your IRA or 401(k) before you convert.

How to convert

Converting is simple. Just follow the steps for the Fidelity or non-Fidelity account you'd like to convert to a Roth IRA.

Which type of Fidelity account would you like to convert?

Fidelity traditional IRA

Fidelity 401(k)

After you've opened a Fidelity Roth IRA, call the plan's toll-free number located on your statement and a Fidelity representative will assist you in rolling over your assets to your new Fidelity Roth IRA.

Which type of non-Fidelity account would you like to convert?

Convert a traditional IRA

Start by opening a Fidelity traditional IRA.

Next, transfer the assets from your non-Fidelity IRA to your new Fidelity IRA, tax-free and penalty-free.

Finally, convert your Fidelity traditional IRA to a Roth IRA.

Convert a 401(k)

Start by opening a Fidelity Roth IRA.

Next, call 800-343-3548 or visit an Investor Center. A Fidelity representative will assist you in rolling over your assets to your new Fidelity Roth IRA.

Deadline to convert at Fidelity

December 31 of the tax year. If that falls on a weekend, the processing deadline is 4 p.m. ET on the year's last business day.

Not sure on how much to convert?

Try our Roth conversion calculator to compare your tax bite today on different conversion amounts vs. potential tax savings down the road.


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