Fidelity Says Roth Conversions Jumped 41% in Q1 as Market Dips Cut Tax Costs
Updated
Updated · Bloomberg · Jun 11
Fidelity Says Roth Conversions Jumped 41% in Q1 as Market Dips Cut Tax Costs
1 articles · Updated · Bloomberg · Jun 11
Summary
Roth IRA conversions rose 41% in the first quarter from a year earlier, Fidelity said, while IRA contributions also reached a record high.
March’s more than 5% drop in the S&P 500 — tied in the report to the Iran War — likely helped drive the surge by lowering the tax bill on assets moved into Roth accounts.
The appeal is paying taxes now rather than later: converted funds can grow tax-free and be withdrawn tax-free after age 59 1/2, giving savers more control over future tax planning.
Income caps bar direct Roth IRA contributions above $168,000 for individuals and $252,000 for married couples, but the widely used backdoor Roth strategy still channels money into Roth accounts.