Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.
Data & Research August 23, 2010
More Younger Investors are Making the Conversion to Roth IRAs
In an analysis of households that have converted to a Roth IRA, Fidelity Investments has found that a growing number of younger investors are making the conversion.
Reported by Nicole Bliman
The number of customers making the conversion between the ages of 35 and 49 has more than doubled – from 15% in 2009 to 31% in 2010. On the other hand, investors ages 50 and over have been turning away from the Roth IRA conversions, with 75% a year ago to 55% today. And even fewer retirees – investors over the age of 65 – are making the Roth IRA conversion. There were 19% fewer conversions among retirees from 2009 to 2010.
In the analysis, Fidelity Senior Vice President Chris McDermott says that while Fidelity is pleased to see the number of younger people making the switch to a Roth IRA, it is equally important for older investors to be considering the benefits as well.
Fidelity expects that the popularity of Roth IRA conversions will continue to rise as people become more aware of the potential tax benefits. And to meet the needs of this growing trend, they have launched a new podcast on Fidelity.com to help investors understand the process of the conversion and weigh the potential benefits.