Fidelity Investments said Roth individual retirement account conversions rose fourfold at the firm in 2010 as investors became better informed about minimizing their tax obligations in retirement — with some help from Fidelity financial advisers.
Approximately 220,000 Roth IRA conversions were completed last year at Fidelity as investors raced to take advantage of the increased contribution limit and their ability to spread out tax liability over 2011 and 2012, officials at the Boston firm said.
A good chunk of the conversions — roughly a third — took place in December.
Fidelity financial advisers ramped up their education and sales efforts to get new or established clients to jump on the Roth bandwagon by moving their 401(k) or traditional IRA accounts.
"The numbers speak for themselves," Fidelity spokesman John Eidson said. "They speak to the concerted and heightened effort on the part of advisers to educate clients about Roth IRAs and explaining why now might be a good time to convert."
An internal Fidelity survey found that 40% of investors became aware of the Roth IRA by the end of the year, versus just 15% in August 2009.
Fidelity said investors were more active about finding ways to minimize taxes to offset at least some of the additional expenses retirees can incur once they've stopped working.
Among households that completed a Roth IRA conversion last year, 58% were 50 years of age or older.
