Help: Backdoor Roth on Vanguard

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Topic Author
Thesaints
Posts: 2353
Joined: Tue Jun 20, 2017 12:25 am

Help: Backdoor Roth on Vanguard

Post by Thesaints » Sun Apr 14, 2019 1:29 pm

I have been fighting with this for a few years.
DW Vanguard account is in this new brokerage structure.
That means she has a Traditional IRA account and a Roth IRA account each with its own settlement fund.
When we convert from the traditional IRA to the Roth to execute a backdoor, we are forced to exchange from the Traditional IRA fund into the Roth settlement fund, wait past the closing of a trading day and only then we can move the money within the Roth IRA, from the settlement fund to its final destination.

Is there a way to do a single transaction ? It seems absurd that Vanguard would force us to waste our time this way.
Thanks in advance to whomever can explain to me what we are doing wrong.

Silk McCue
Posts: 2170
Joined: Thu Feb 25, 2016 7:11 pm

Re: Help: Backdoor Roth on Vanguard

Post by Silk McCue » Sun Apr 14, 2019 2:04 pm

When I convert by performing a sell to buy exchange the funds go straight from the tIRA into the funds I designate in the Roth. I don’t have to do a two step tango. That could be because I already hold the desired funds in the Roth and therefore can simply select them.

Cheers

Topic Author
Thesaints
Posts: 2353
Joined: Tue Jun 20, 2017 12:25 am

Re: Help: Backdoor Roth on Vanguard

Post by Thesaints » Sun Apr 14, 2019 2:11 pm

Not sure I understand. When exchanging the tIRA I don’t get a choice of where in the Roth that money will go. It just says “Roth IRA brokerage account” and that means its settlement fund.

Silk McCue
Posts: 2170
Joined: Thu Feb 25, 2016 7:11 pm

Re: Help: Backdoor Roth on Vanguard

Post by Silk McCue » Sun Apr 14, 2019 2:40 pm

I just walked through the Exchange (Sell to buy) steps. Once I choose the Roth account as the Target to receive funds it has me click a hyperlink to perform a conversion. I have zero in my IRA settlement fund which is shown and the accurate reflection of the other holdings in the IRA is shown for which I can enter the number of shares to be converted.

A note below that section reads:
† This total is estimated based on the previous NAV or closing price. The actual conversion amount is based on today's NAV or closing price. You'll receive final confirmation with the transaction details for all of the holdings converted. Holdings other than your money market settlement fund will be transferred in-kind.
This is how I remember it being done in the past. If you are converting funds rather than the settlement fund in the traditional i would think this is what you should be seeing.

Cheers

Topic Author
Thesaints
Posts: 2353
Joined: Tue Jun 20, 2017 12:25 am

Re: Help: Backdoor Roth on Vanguard

Post by Thesaints » Sun Apr 14, 2019 5:20 pm

Does it let you choose where in the Roth account the money will go ? In my tIRA we only have the settlement fund. In the Roth we have settlement fund and the final destination fund.

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