Announcement

Collapse
No announcement yet.

How to do backdoor Roth on fidelity?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Tim
    replied
    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.

    Leave a comment:


  • Peds
    replied
    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.

    Leave a comment:


  • pitt1166
    replied
    awesome, thank you both very much for the replies. it's now crystal clear for me. thank you again!!!

    Leave a comment:


  • Vottomatic
    replied
    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.

    Leave a comment:


  • Tim
    replied
    “after i transfer the money to the roth IRA”
    Bingo.

    Leave a comment:


  • pitt1166
    replied
    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!

    Leave a comment:


  • hnnguyen3
    replied
    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).

    Leave a comment:


  • EJ at Dads Dollars and Debts
    replied
    I called the other day and they said wait 5 business days. Annoying as Vanguard does not do this.

    I have a step by step tutorial coming up on my website this Saturday...so feel free to check it out.

     

    Leave a comment:


  • Phoenixdown99
    replied
    Give it a few days. Mine always does the same thing.

    Leave a comment:


  • DMFA
    replied




    Going to piggy back off this thread.

    Currently I have 2 rollover IRA accounts with Fidelity. One is at zero dollars, the other around 7200. I also have a Roth IRA account that’s already set up.

    I’m a little confused about the pro rata rule and if that would apply to the one rollover account with money in it. Do I need to move that money in order to do backdoor Roth? Can I use the zero account for placing cash before converting to Roth, or do I need to set up a Traditional IRA account (which I don’t have yet).

    Thanks in advance
    Click to expand...


    Either. You just need to have $0 in all pretax IRAs on 12/31 of the year in which the conversion occurs...in this instance 12/31/2018. I think you should be able to use the rollover IRA for contributions; I think it's just a label and not a distinctly treated entity since EGTRRA in 2001.

    As long as you convert an amount equal to your non-deductible contribution (usually $5,500/yr) and rollover the rest into a pretax qualified plan like 401(k) or 403(b), there should be no tax. I've seen it recommended to do the pretax rollover first just to make sure it actually works; I'm not sure that's really necessary, especially since there's a deadline for 2017 contributions and they need to be in before your taxes are done (though the conversions go on 2018's taxes due next year).

    Leave a comment:


  • GasFIRE
    replied










    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.
    Click to expand…


    It’s not the “settled cash” that counts; it’s the “cash available to withdraw.” Check back each business day.
    Click to expand…


    Cash available to withdraw is 5,500 too, which is why I’m confused. Hopefully just a Sunday/Same day issue.
    Click to expand...


    It should be just a "Sunday" issue. For as long as I've been doing this, I would make the initial transfer on Jan 1, the next business day convert from the tIRA to the Roth, and could make investment transactions inside the Roth one business day later. It's hard to be patient when you have a good idea 

    Leave a comment:


  • Rotish
    replied







    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.
    Click to expand…


    It’s not the “settled cash” that counts; it’s the “cash available to withdraw.” Check back each business day.
    Click to expand...


    Cash available to withdraw is 5,500 too, which is why I’m confused. Hopefully just a Sunday/Same day issue.

    Leave a comment:


  • bikERdoc
    replied
    Going to piggy back off this thread.

    Currently I have 2 rollover IRA accounts with Fidelity. One is at zero dollars, the other around 7200. I also have a Roth IRA account that's already set up.

    I'm a little confused about the pro rata rule and if that would apply to the one rollover account with money in it. Do I need to move that money in order to do backdoor Roth? Can I use the zero account for placing cash before converting to Roth, or do I need to set up a Traditional IRA account (which I don't have yet).

    Thanks in advance

    Leave a comment:


  • DMFA
    replied




    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.
    Click to expand...


    It's not the "settled cash" that counts; it's the "cash available to withdraw." Check back each business day.

    Leave a comment:


  • Rotish
    replied
    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.

    Leave a comment:

Working...
X