A recent Fidelity Investment survey shows tax advisors believe some 43 percent of clients would benefit from a Roth IRA conversion, given that two-thirds (66 percent) of advisors also think income taxes will generally rise in the future.
Most (88 percent) advisors also expect discussions with their clients about Roth IRA conversions will increase during the next six months.
According to Fidelity, this interest mirrors fund company’s internal data that shows nearly 1,000 investors and advisors each day are using the Roth Conversion Evaluator, a tool that helps them consider whether a Roth IRA conversion may make sense for them.
“As this is a complex decision, it’s encouraging that investors are engaging financial services providers and tax advisors to develop an overall retirement plan and discuss the potential benefits of a Roth IRA conversion,” said Chris McDermott, senior vice president, investor education, retirement and financial planning, Fidelity Investments in a statement.
“Fidelity believes investors should consider a variety of tax strategies when saving for retirement, including a Roth IRA, which offers tax-free growth potential and withdrawals at retirement, if certain conditions are met,” he explained.