Roth conversions are the hottest topic in retirement planning — but according to new reporting, the number of people who actually do them is tiny compared to the hype. And the research suggests most of us should not feel bad about sitting this one out.
Roth conversions (Image Credits: MarketWatch)
The Investment Company Institute reported that just 1.6 million Roth conversions happened in 2023 — worth $36.7 billion out of roughly $17 trillion sitting in traditional IRAs in the U.S. The average conversion was just under $23,000. Fidelity found that only 2% of its 20 million IRA customers made a Roth conversion in 2025.
Roth Conversions: Why So Few People Do Them
“People are hungry for it, but the dollars, from what we see, are still pretty small. There’s basically a lot of engagement without a lot of transactions,” said Rita Assaf, Fidelity’s vice president of retirement and college products.
The barriers are real, per the reporting: a conversion only pays off if you have cash on hand to pay the tax bill, can confirm you’ll benefit from paying tax now instead of later, and have the know-how to complete the complicated transaction. You have to do the math on your own situation — there is no one-size-fits-all answer.
When a Roth Conversion Makes Sense — and When It Doesn’t
The data-backed case for conversions is narrow: they tend to work best for savers in specific “low-income windows,” such as the years between early retirement and required minimum distributions at 73. But converting too much in a single year can create a painful tax bill, push income over thresholds that trigger higher Medicare premiums (IRMAA), or reduce ACA subsidies for those retiring before 65.
The bottom line from the research: a Roth conversion is a math problem, not a moral one. If the numbers don’t work for your situation, the FOMO is not warranted. This is general information from the cited research, not personal financial advice — consider consulting a qualified financial adviser about your own retirement strategy.
Also Read: Over 40% of Americans Are Heading Toward Retirement ‘Blind’ With No Plan, Report Finds
Source: MarketWatch — read the full story there.