Less than a third of investors who are newly eligible to complete a Roth IRA conversion are aware of the flexibility they have to "undo" the move even though there is an Oct. 15 deadline, according to a recent Fidelity Investments study.

The process, known as "recharacterization," allows an investor to reverse amounts converted from a traditional IRA to a Roth IRA and recover any taxes paid, according to a statement.

"Deciding whether to convert to a Roth IRA or not, as well as the resulting tax implications from the conversion, can be confusing for many investors, "said Chris McDermott, senior vice president, investor education, retirement and financial planning, Fidelity Investments. "Knowing that they have the ability to reverse the Roth IRA conversion in the event their financial situation changes can help them be more confident in making a decision."

A recent Viewpoints article from Fidelty notes several reasons some may consider a recharacterization. These include: an increase in an investor’s taxable income that results in a shift to a higher federal income tax bracket; a drop in anticipated taxable income in retirement, which could reduce the benefits of a Roth IRA’s tax-free distributions; a decline in the value of the investments in the converted Roth IRA; and the inability to pay the taxes that resulted from the Roth IRA conversion.

"The removal of income restrictions on Roth IRA conversions this year opened the door for many investors to have access to this type of account for the first time," said McDermott. "We encourage investors to do their homework, work with their tax professionals, and fully understand how a Roth IRA might fit into their long-term retirement plans and potentially help minimize taxes and maximize retirement savings."