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How to do backdoor Roth on fidelity?

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  • #16
    I recently contributed 5.5K for 2017 and 5.5K for 2018 and encountered the same issue.  You have to wait until the money is clear (4-5 business days for me).  You can tell by going to the IRA account balance sheet.  Make sure cash available to withdrawal is the amount you transferred.  (The settled cash amount may have some money but it doesn't count, which makes things confusing as heck.)  When I converted mine tIRA to Roth IRA it had to be 11K total (at 5.5K I still encountered the same message).

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    • #17
      a similar but unrelated question, piggybacking on this thread rather than starting a new one...

      i am doing a backdoor roth ira for the first time. i have deposited 6k into my fidelity traditional IRA account today (i understand it will take a few days for the funds to be available to transfer to a roth IRA).

      my question is-- when in this process do i use the 6k to purchase index funds/equities/ETF/etc-- after i transfer the money to the roth IRA, or do i buy the index funds/equities/ETF/etc while the money is in the traditional IRA account? or does it not matter?

      probably a dumb question but thank you for any help/recs/advice!

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      • #18
        “after i transfer the money to the roth IRA”
        Bingo.

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        • #19
          Definitely DO NOT buy any kind of funds/securities while the money is parked in the traditional IRA account! That can drastically change the amount that will be converted, and you might find yourself on the hook for some taxable gains as a result. The traditional IRA is a "passthrough" account, nothing more. The money will just sit in there in your predetermined state (typically a money market fund that makes essentially nothing) for five days prior to it clearing, and then you can transfer it to the Roth IRA account. Then, and ONLY THEN, should you invest in whatever you want. While sitting in the money market, if it's only for five days, you should make no more than 1-2 cents of interest; go ahead and convert that too, as it won't make a difference in your taxable amounts. If for some reason you transfer it to the Roth account, and then you notice there's a penny in your traditional account (this happened to me this year somehow), just leave it and convert it next year.

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          • #20
            awesome, thank you both very much for the replies. it's now crystal clear for me. thank you again!!!

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            • #21
              Originally posted by LoselessDeveloper
              Initial funds came from my fidelity checking account.

              Just transferred from checking to the traditional this morning. It immediately said 5500 in settled cash available to trade in the IRA account. Maybe I’ll wait a business day before converting.
              limit is 6K.

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              • #22
                Originally posted by LoselessDeveloper
                Initial funds came from my fidelity checking account.

                Just transferred from checking to the traditional this morning. It immediately said 5500 in settled cash available to trade in the IRA account. Maybe I’ll wait a business day before converting.
                On your balances screen, not available to trade.
                Line below is “available to withdraw”. That means available to convert. Check the boxes for Total and leave account open.

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