Only about half of current individual retirement account owners say they know about the new Roth IRA conversion rule change.
LIMRA, Windsor, Conn., has reported that finding in a summary of results from a January survey of about 800 U.S. adults.
LIMRA researchers found that:
- 54% of current IRA holders are unaware of the rule change.
- 75% of all survey participants are unaware of the rule change.
Women who participated were less likely than men who participated to be aware of the rule change, according to LIMRA.
The new Roth IRA conversion rule has eliminated the old $100,000 income cap on eligibility for Roth IRA conversions.
The change means that all taxpayers, including high-income taxpayers, now can convert traditional IRAs and other eligible qualified retirement plans into tax-free Roth IRAs.
Converters must pay income taxes on the assets converted at the time of conversion, but the taxes now can be paid over 2 years, rather than all at once.
The government says Roth IRA income will not be taxes.
LIMRA found that about 40% of respondents said they owned an IRA. The consumers who were aware of the rule changes were more likely than other participants to have incomes greater than $75,000 or to be 65 or older.
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