Vanguard - cannot convert to roth

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Warriorpoet85
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Vanguard - cannot convert to roth

Post by Warriorpoet85 » Thu Jan 11, 2018 1:34 pm

Hey everyone,

This is the first year I am making a Roth conversion (AGI >200k, married). I put 5500 in for both my wife and me. Initially had to wait the seven days for money to clear at Vanguard and then when that finally happened, I couldn't convert to Roth (said no shares available). So, I moved all of the money out of the Settlement Fund into the Federal MM fund. Now I am having the following problem:

Our money is still sitting in the Federal Money Market Account in the traditional IRA brokerage account. When I click "convert to Roth" just above this it says, "There are no available accounts for this conversion"

I apparently can exchange funds (I want it all in a Roth account in the Total Stock Market Index Fund) into a traditional account mutual fund, but am afraid that if I do that it will still not let me convert and will start making money I don't want it to make yet.

Can anyone please help. It's been extremely frustrating and I even earned $1 in dividends as it sits there so now my 8606 won't be as clean.

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hornet96
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Re: Vanguard - cannot convert to roth

Post by hornet96 » Thu Jan 11, 2018 1:40 pm

1. Have you already opened the Roth IRA account? If not, I believe you have to do this first (with a $0 initial contribution).
2. Is your Traditional IRA account a legacy mutual fund account, while your Roth IRA is a VBS brokerage account? If there is a mismatch (i.e. one is a traditional mutual fund account, and one is a VBS brokerage account), that may be your problem (i.e. their system can't "see" the other type of account when you go to convert).

GmanJeff
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Re: Vanguard - cannot convert to roth

Post by GmanJeff » Thu Jan 11, 2018 1:45 pm

Hornet is correct - you have to have an existing Roth account, even with a zero dollar/share account balance, so that you can specify it as the destination for the funds you want to move from your Traditional IRA. You cannot move funds to a non-existent account.

Warriorpoet85
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Re: Vanguard - cannot convert to roth

Post by Warriorpoet85 » Thu Jan 11, 2018 1:49 pm

Can I open a Roth account with zero dollars?

boglechu
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Re: Vanguard - cannot convert to roth

Post by boglechu » Thu Jan 11, 2018 1:52 pm

Same thing happened to me. Open a Roth with no money. Then convert.

jh-1391
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Re: Vanguard - cannot convert to roth

Post by jh-1391 » Thu Jan 11, 2018 1:52 pm

Warriorpoet85 wrote:
Thu Jan 11, 2018 1:49 pm
Can I open a Roth account with zero dollars?
Yes. I just helped a family member with this.

livesoft
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Re: Vanguard - cannot convert to roth

Post by livesoft » Thu Jan 11, 2018 1:55 pm

Note to Vanguard peeps reading this thread: Do you see how customers would benefit from a better web site? They don't even want to call you up and get help.
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Warriorpoet85
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Re: Vanguard - cannot convert to roth

Post by Warriorpoet85 » Thu Jan 11, 2018 1:59 pm

Thanks for the help! This worked. Not intuitive at all, really. Glad this community exists!

livesoft
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Re: Vanguard - cannot convert to roth

Post by livesoft » Thu Jan 11, 2018 2:00 pm

Actually, when you open a new account, including a Roth, doesn't vanguard.com ask "Where is the money coming from?" Then you answer "My traditional IRA"
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Warriorpoet85
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Re: Vanguard - cannot convert to roth

Post by Warriorpoet85 » Thu Jan 11, 2018 2:10 pm

livesoft wrote:
Thu Jan 11, 2018 2:00 pm
Actually, when you open a new account, including a Roth, doesn't vanguard.com ask "Where is the money coming from?" Then you answer "My traditional IRA"
I just clicked "will add money later" and opened the account.

Then converted to Roth using button. Unfortunately, have to wait another day before I can put it all in the Total Stock Market Index Fund. For another 24 hours will be sitting in limbo

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cfs
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Re: Vanguard - cannot convert to roth

Post by cfs » Thu Jan 11, 2018 2:21 pm

Vanguard
Vanguard
Vanguard

The website was acting funny again, it was giving me a totally different product when I was clicking to see the ETF version of a couple of mutual funds. Billions, and billions, and billions of inflows, and not a penny invested in fixing their less-than-satisfactory website.

And now we return to your regularly scheduled programming with "Vanguard - cannot convert to roth"

Good luck with Vanguard, and thanks for reading ~cfs~
~ Member of the Active Retired Force since 2014 ~

IndigoInkTaco
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Re: Vanguard - cannot convert to roth

Post by IndigoInkTaco » Thu Jan 11, 2018 2:38 pm

I recently did a conversion on vg and thought to myself how easy it was. I opened both accounts, transferred from another institution and then clicked on the "convert to roth" button on the other account. Asked which funds to change, and it was all done. Surprised to see people complaining about their site. I'm pretty happy with how easy it is to navigate and utilize compared some other institutions out there.

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cfs
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Re: Vanguard - cannot convert to roth

Post by cfs » Thu Jan 11, 2018 3:03 pm

IndigoInkTaco wrote:
Thu Jan 11, 2018 2:38 pm
. . . I recently did a conversion on vg and thought to myself how easy it was . . .
Welcome aboard, your first post! Keep those posts coming and thanks for reading ~cfs
~ Member of the Active Retired Force since 2014 ~

Warriorpoet85
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Re: Vanguard - cannot convert to roth

Post by Warriorpoet85 » Sat Jan 13, 2018 10:01 pm

IndigoInkTaco wrote:
Thu Jan 11, 2018 2:38 pm
I recently did a conversion on vg and thought to myself how easy it was. I opened both accounts, transferred from another institution and then clicked on the "convert to roth" button on the other account. Asked which funds to change, and it was all done. Surprised to see people complaining about their site. I'm pretty happy with how easy it is to navigate and utilize compared some other institutions out there.
How did you intuitively know to open a Roth IRA and fund it with zero dollars when there is a "convert to Roth" button just above the traditional IRA?

sambb
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Re: Vanguard - cannot convert to roth

Post by sambb » Sat Jan 13, 2018 10:08 pm

vanguard has a old website and poor customer service on many fronts - you have to dig deeper, and may have to call or seek opinions on doing these things. Probably money is saved with their approach.

IndigoInkTaco
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Re: Vanguard - cannot convert to roth

Post by IndigoInkTaco » Wed Jan 17, 2018 3:02 pm

cfs wrote:
Thu Jan 11, 2018 3:03 pm
IndigoInkTaco wrote:
Thu Jan 11, 2018 2:38 pm
. . . I recently did a conversion on vg and thought to myself how easy it was . . .
Welcome aboard, your first post! Keep those posts coming and thanks for reading ~cfs
Thanks!
Warriorpoet85 wrote:
Sat Jan 13, 2018 10:01 pm
IndigoInkTaco wrote:
Thu Jan 11, 2018 2:38 pm
I recently did a conversion on vg and thought to myself how easy it was. I opened both accounts, transferred from another institution and then clicked on the "convert to roth" button on the other account. Asked which funds to change, and it was all done. Surprised to see people complaining about their site. I'm pretty happy with how easy it is to navigate and utilize compared some other institutions out there.
How did you intuitively know to open a Roth IRA and fund it with zero dollars when there is a "convert to Roth" button just above the traditional IRA?
Not sure I can explain how I assumed to open it with a zero balance. But I knew that the IRA would need a roth account in order for it to be transferred in to. Without that Roth account, I couldnt convert anything. So I guess I just assumed something had to already be open in order for the transfer to take place and that the "convert to roth" button wouldn't open a new account on its own.
Hope that makes sense.

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