Convert to a Roth IRA

A way to help minimize taxes and maximize growth potential

Converting your savings to a Roth IRA allows you to take advantage of potential tax-free growth and withdrawals1 without minimum required distributions in retirement.

Who should convert?

We believe most investors should consider including a Roth IRA as part of their overall retirement savings plan. If you have already started saving in another retirement account, converting to a Roth IRA may help you minimize taxes and maximize your retirement savings. The decision to convert needs to be made with care and should include a consultation with your tax advisor.

Before you decide, consider these three key factors:

  1. Taxes—If you anticipate a higher tax rate in retirement or plan to leave your savings to your heirs, you may want to consider a Roth conversion. You may pay lower taxes now with a conversion than if you wait to pay taxes in retirement.
  2. Time—Generally, if you have 10 years or more before you'll begin to take withdrawals, a conversion is likely to benefit you. Some investors with a shorter time horizon may also benefit based on other considerations.
  3. Cost—Can you cover the cost of the taxes you'll need to pay with cash or other non-retirement savings? If not, it might not be advantageous to convert.

Roth Rule Change Beginning in 2010

Conversion income limits are going away in 2010.

Get more details
Find out if converting to a Roth IRA makes sense for you.
Read frequently asked questions about IRA conversions

How to convert, recharacterize, or reconvert your IRA

Complete a Conversion from a Traditional IRA to a Roth IRA
Deadline:  December 31, 2009, for the 2009 tax year
(provided tax returns are filed on a timely basis).

IRA from another financial company

  1. Open a Fidelity Traditional IRA
  2. Transfer the IRA assets to your new Fidelity Traditional IRA
  3. Convert the IRA (PDF) . Opens in a popup.

Fidelity IRA

Special Considerations

  • Income minus tax deductions, also known as Modified Adjusted Gross Income, must be $100,000 or less1.
  • If you are married, you must file a joint income tax return.
  • Generally, converted assets in the Roth IRA must remain there for at least five years to avoid penalties and taxes.
Complete a Roth IRA Recharacterization to a Traditional IRA
Deadline:  Six months after the unextended due date of the return for the year of the conversion or the year for which the contribution was made.

IRA from another financial company

  1. Complete a Fidelity Recharacterization Form (PDF) . Opens in a popup.
  2. Complete a Fidelity IRA Application if you have not already opened a Fidelity Traditional IRA. (For direct conversions to a Fidelity Roth IRA from a Traditional IRA held at another financial institution.)

Fidelity IRA

  1. Complete a Fidelity Recharacterization Form (PDF) . Opens in a popup.

Special Considerations

  • Must be a trustee-to-trustee transfer (i.e., you should not take possession of the assets).
  • Any related earnings must be recharacterized as well.
  • Fidelity will perform an earnings calculation for your recharacterization upon receipt of your Recharacterization Form.
  • Partial recharacterizations are more complicated than full recharacterizations, since special calculations are required. Consult a tax advisor if you choose to do a partial recharacterization.
Learn more about converting
Complete a Traditional IRA Reconversion to a Roth IRA
Deadline:  If you have converted assets from a Traditional IRA to a Roth IRA and subsequently recharacterized that conversion, you may not reconvert until the later of January 1 of the year following the conversion or 30 days after the recharacterization.

Special Considerations

  • Consult your tax advisor regarding your eligibility to complete a reconversion.
Complete a Rollover from your 401(k) to a Roth IRA
 

401(k) serviced by another financial company:

  1. Open a Fidelity Roth IRA
  2. Call 1-800-FIDELITY or visit an Investor Center and a Fidelity representative will assist you in rolling over your assets to your new Fidelity Roth IRA

If your 401(k) is serviced by Fidelity:

  1. Open a Fidelity Roth IRA
  2. Call your 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.

Special Considerations

Learn more about converting

The rules are changing in January 2010

Before January, single investors and married investors filing jointly with modified adjusted gross incomes greater than or equal to $100,000 (as well as married investors filing separately) were ineligible for a Roth conversion. In 2010, the conversion income limit will be removed. Every investor will be able to convert to a Roth IRA (the annual contribution income restrictions will still apply).

Investors who convert in 2010 have the option to spread their tax liability by including half of the conversion in their 2011 tax return and half in their 2012 tax return. In subsequent years, they will have to pay all taxes the year they convert.

Before you make your move, you may want to consult your tax advisor about your particular situation.


  1. A distribution from a Roth IRA is tax free and penalty free provided that the five-year aging requirement has been satisfied and at least one of the following conditions have been met: you reach age 59½, die, suffer a disability, or make a qualified first-time home purchase.

There is no brokerage account fee on Fidelity's Traditional, Roth, SEP, and Rollover IRAs. Fund expenses and brokerage commissions still apply. Depending on your situation, fees may include low-balance fees, short-term trading fees and account closing fees.

Converted amounts are not included in your modified adjusted gross income (MAGI) when determining eligibility. If you are married filing jointly or single, prior to 2010 your MAGI cannot exceed $100,000 in the year you convert. If you are married filing separately, you are not eligible to convert unless you have lived apart from your spouse for the entire taxable year.

Important information about transferring, re-registering your account and the Treasury guarantee program for money market funds.

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