Can you help me clean up my Roth IRA mess?

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Topic Author
peterwantstosave
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Joined: Fri Nov 24, 2017 8:28 pm

Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Sun Jun 23, 2019 8:43 am

Friends,

I've posted in the past about the number of IRAs mostly Roth's that I've accumulated in the past. Please don't judge, I was dumb and I understand that now. My goal going forward is not to be (so) dumb in the future :-)

As it stands, I now have the following accounts: can you help me consolidate them into one account?

Ally Invest $1 ($1 contribution) (Contribution Year: 2017)
Charles Schwab $3.68 ($3 contribution) (Contribution Year: 2017)
Wells Fargo $39.75 ($39 contribution) (Contribution Year: 2018)
Parnassus $618.25 ($589.99 contribution) (Contribution Year: 2019)
TIAA $1,367.39 ($1188.53 contribution) (Contribution Years: 2017 & 2018)
Vanguard $5,465.66 ($3305.74 contribution) (Contribution Years: 2018 & 2019)

Totals . $7495.73

As I see it, I have three options:

1) Do nothing
2) Withdraw some
3) Withdraw all

I tried to do trustee to trustee transfers on the small three accounts, but was unable to do so.

To make matters even more interesting, I also have a Trad IRA (old, from Cap One used to be Etrade) that has a grand total of $11.10 in it. What should I do with that?!?

I don't need this money, and I'm young, (35), so I could just let it sit there--but honestly, I'm annoyed by my past self and would rather consolidate and move on with my life. What's the best way to do this? Ideal would be to have all Roth IRA holdings in (only) one place. I wish VG's customer service were better, it is frankly awful. I get treated funny (and laughed at) when I mention the small balances there. Yes, I know I made a mistake, LOL :-)

These accounts amount to about 25% of my overall retirement holdings (403b & annuity).

Thanks all.

P

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Sun Jun 23, 2019 8:56 am

Edited to add....not sure all this information is correct. See later posting.

peterwantstosave wrote:
Sun Jun 23, 2019 8:43 am
Ally Invest $1 ($1 contribution) (Contribution Year: 2017)
Charles Schwab $3.68 ($3 contribution) (Contribution Year: 2017)
Wells Fargo $39.75 ($39 contribution) (Contribution Year: 2018)
These apparently are too small for a trustee to trustee rollover. Close out each account, put the money in your checking account, write out a check for the total and send it to Vanguard as a 60 day rollover to your current Roth account. Some paperwork will need to be signed. You have 60 days to get the money into Roth again. You will get tax forms in January but since you rolled each over within 60 days there is nothing to report on your taxes.

Parnassus $618.25 ($589.99 contribution) (Contribution Year: 2019)
TIAA $1,367.39 ($1188.53 contribution) (Contribution Years: 2017 & 2018)
Do a trustee to trusee transfer of these to your current Vanguard Roth IRA account.

To make matters even more interesting, I also have a Trad IRA (old, from Cap One used to be Etrade) that has a grand total of $11.10 in it. What should I do with that?!?
Close the account and do a 60 day rollover to the Roth IRA. Tax will be due next tax day. This is calculated and reported on Form 8606.

I wish VG's customer service were better, it is frankly awful. I get treated funny (and laughed at) when I mention the small balances there. Yes, I know I made a mistake, LOL :-)
If you prefer, move everything to Fidelity.

These accounts amount to about 25% of my overall retirement holdings (403b & annuity).
Annuity? You mean the 403b or something else? In general, an annuity (other than a 403b) is not something you should want or need.

Don't worry about past mistakes. Just fix it and move on.
Last edited by retiredjg on Sun Jun 23, 2019 10:21 am, edited 1 time in total.

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Sun Jun 23, 2019 8:57 am

If there is some problem with closing the small accounts, such as a $50 closing fee, just abandon the money.

HomeStretch
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Re: Can you help me clean up my Roth IRA mess?

Post by HomeStretch » Sun Jun 23, 2019 8:59 am

ETA - good advice from retiredjg on small balances.

Have you talked to a Vanguard account transfer specialist to come up with a plan to move the Roth IRAs?

Transfer the ones you can via direct trustee-to-trustee transfer. I know Wells Fargo does them and some of the others on your list probably do too.

For the sending institutions that won’t do direct transfers, you can do still move one every 12-month period. To avoid issues, talk to Vanguard to make sure you understand how to have the check payee made out, 60-day period to get the funds deposited into your Vanguard account and how the dates are calculated for the 12-month period.
Last edited by HomeStretch on Sun Jun 23, 2019 9:01 am, edited 1 time in total.

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Sun Jun 23, 2019 9:01 am

thanks Retiredjg!

The annuity is from my first year at my current employer (they wouldn't allow me to participate in a 403b as a year one employee, so not knowing any better, I opened a variable annuity with them).

Appreciate the help,

Peter

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Sun Jun 23, 2019 10:48 am

Peter, don't get too excited because some of the information I gave above is probably not correct. I'm sorry. I had forgotten about the "one per year" rule. :oops:

Some quick research has not clarified things for me. According to the "one per year" rule, you can only do 1 60 day rollover per year. There are some exceptions such as rolling from tIRA to Roth IRA (a Roth conversion). I think my sub-conscious was thinking that Roth to Roth is an exception, but the rules do not say anything about that.

So, let's try this again.

Ally Invest $1 ($1 contribution) (Contribution Year: 2017)
Charles Schwab $3.68 ($3 contribution) (Contribution Year: 2017)
Wells Fargo $39.75 ($39 contribution) (Contribution Year: 2018)
You could simply cash the first two out and deal with the paperwork on your tax return next year.

Ally - has no growth so there is no tax or penalty. You are allowed to take your $1 contribution anytime.
Schwab - The $3 is available any time, but you will pay tax and 10% penalty on 68 cents. Form 8606 - Part III, follow the worksheet in the instructions for the form.

Wells Fargo $39- I would do your one 60 day rollover on this one. Cash it out and send a check for the same exact amount to Vanguard (or wherever) within 60 days with the explicit instructions that this is a 60 day rollover from Roth to Roth. They probably have some specific paperwork for this.


Since you have kept good records about your contributions, the Form 8606 worksheet should not be too difficult for the first 2 tiny Roth IRAs. And the tax an penalty will be pennies if anything. I would not try to just avoid this on your taxes. Just do it right the first time even though it is somewhat ridiculous. In two years, if the computers notice you didn't do it, you might be asked to rectify it then. Easier to just do it next spring.

Or, I suppose you can just abandon the money. I don't know what the procedure for this is.

Parnassus $618.25 ($589.99 contribution) (Contribution Year: 2019)
TIAA $1,367.39 ($1188.53 contribution) (Contribution Years: 2017 & 2018)
Do the suggested trustee to trustee transfer on these. This type of transfer does not count as your "60 day rollover".

To make matters even more interesting, I also have a Trad IRA (old, from Cap One used to be Etrade) that has a grand total of $11.10 in it. What should I do with that?!?
Close the account and do a 60 day rollover to the Roth IRA. Tax will be due next April (no not withhold tax during the conversion). This is calculated and reported on Form 8606.
Same recommendation as before. This does not count as your "60 day rollover" because it is a Roth conversion.

Again, I'm so sorry for steering you wrong in the earlier post.

About the annuity. Variable annuities are very rarely worth having because the fees are so high. I would stop contributing to this and investigate what it will cost in surrender charges to get your money out.

You seem to have a desire to save money but have made some "less than perfect" choices about where to put it. You can contribute $6k to a Roth IRA this year. Be sure you do that. Any other money should go into savings (do you have an emergency fund?).

Keep up the good efforts. You are on your way to getting the hang of this. We've all paid some "tuition" for our financial education by doing something dumb somewhere along the line. Don't let it worry you. :happy

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Sun Jun 23, 2019 10:58 am

Thanks for the clarification. I appreciate the suggestions and the encouragement.

Alan S.
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Re: Can you help me clean up my Roth IRA mess?

Post by Alan S. » Sun Jun 23, 2019 11:25 am

No matter how many Roth accounts you have, when you take a distribution they are all treated as one combined account.

Did you ask VG what the account balance minimum is to initiate a direct transfer to pull the small accounts over to them? If it turns out they will accept only a couple larger accounts, complete those transfers.

For the others, because of the one rollover rule per 12 months you can only roll over one, so request a distribution of the next largest remaining balance account and do a 60 day rollover to your VG consolidated account.

For the others, just request a distribution and have them close the accounts. That is easier on them then letting them escheat to the state due to recent rules changes. You will get a 1099R for all these distributions, but NOT for the direct transfers. You must report the distributions on Form 8606 and in order to do that you need to know the amount of your total contributions made regardless of the custodian. You would show this amount on line 22 of Form 8606, and until your total distributions exceed the total amount of your contributions the distributions are tax and penalty free. Therefore, you can distribute all of these very small accounts and owe no tax and penalty. Hopefully you kept some record of your total contributions, perhaps the Form 5498 you received for each one, so you can properly report the distributions.

The one 60 day rollover you can do cancels out that distribution. That one must be reported on line 4 of Form 1040, but NOT on Form 8606. Only report on Form 8606 the ones you do not rollover because you cannot under the one rollover limit. Of course, you could drag this out doing rollovers just over 12 months apart, but it would be better to clean up the entire mess as a single current project. In fact, the distributions you cannot roll over or transfer can be used to subsidize your cash to make current distributions up to the contribution max of 6k.

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Sun Jun 23, 2019 11:41 am

thanks Alan, I'll call VG on Monday and ask them to connect me with a transfer specialist.

Peter

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Sun Jun 23, 2019 11:45 am

Alan S. wrote:
Sun Jun 23, 2019 11:25 am
You would show this amount on line 22 of Form 8606, and until your total distributions exceed the total amount of your contributions the distributions are tax and penalty free.
Ah, yes. Thanks. I was treating them individually which is incorrect. So no tax or penalty due on the .68 + .75 cents.


The one 60 day rollover you can do cancels out that distribution.
I don't understand what you mean by this.

kaneohe
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Re: Can you help me clean up my Roth IRA mess?

Post by kaneohe » Sun Jun 23, 2019 12:27 pm

retiredjg wrote:
Sun Jun 23, 2019 11:45 am
Alan S. wrote:
Sun Jun 23, 2019 11:25 am
............................................................

The one 60 day rollover you can do cancels out that distribution.
I don't understand what you mean by this.
Perhaps?? Alan means for the purpose of net contribution basis in the Roth, you have a withdrawal documented
on the 1099R which would appear to decrease the basis. However the rollover restores the basis (cancels the withdrawal).

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Sun Jun 23, 2019 12:30 pm

kaneohe wrote:
Sun Jun 23, 2019 12:27 pm
retiredjg wrote:
Sun Jun 23, 2019 11:45 am
Alan S. wrote:
Sun Jun 23, 2019 11:25 am
The one 60 day rollover you can do cancels out that distribution.
I don't understand what you mean by this.
Perhaps?? Alan means for the purpose of net contribution basis in the Roth, you have a withdrawal documented
on the 1099R which would appear to decrease the basis. However the rollover restores the basis (cancels the withdrawal).
Yep. That is probably what he meant. Thanks.

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Mon Jun 24, 2019 9:00 am

24 hours in, here's an update:

1) Ally will "write off" my $1 contribution and close the account. I'm honestly not sure what this means exactly, but it was explained to me that this way I don't need to do any paperwork and the account will be closed. I called Ally multiple times until I found a person who was willing to be helpful. The first guy laughed at me, so I thanked him for his time and hung up. The second woman was nice but she couldn't understand how I was "allowed" to contribute just one dollar, so she said she couldn't help me, and the third woman told me that my options were either to complete paperwork or to write off the $1 and close the account. I chose the write off and closure. Can someone explain in layman's terms what "write off" means?

2) Called e-trade and they were very helpful with processing my traditional IRA withdrawal of $11.10. It's actually already been withdrawn to a check and I selected 10% withholding, so my check will be 10% less $11.10. The account will be closed for free.

More updates as I have them. This group is helping me do meaningful cleanup. I appreciate the opportunity to journal about all this here.

P

HomeStretch
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Re: Can you help me clean up my Roth IRA mess?

Post by HomeStretch » Mon Jun 24, 2019 9:10 am

peterwantstosave wrote:
Mon Jun 24, 2019 9:00 am
24 hours in, here's an update:

1) Ally will "write off" my $1 contribution and close the account .... I chose the write off and closure. Can someone explain in layman's terms what "write off" means?
Based on your description, it sounds like Ally is not going to distribute the $1 to you so you will not get a $1 check or a Form 1099.

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Mon Jun 24, 2019 9:27 am

Super. That's what I figured. Any downside to this for me? Thank you. P
Last edited by peterwantstosave on Mon Jun 24, 2019 9:30 am, edited 1 time in total.

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Mon Jun 24, 2019 9:30 am

peterwantstosave wrote:
Mon Jun 24, 2019 9:00 am
2) Called e-trade and they were very helpful with processing my traditional IRA withdrawal of $11.10. It's actually already been withdrawn to a check and I selected 10% withholding, so my check will be 10% less $11.10. The account will be closed for free.
When you get the check, see what the withholding was. When you make your 60 day rollover to Roth IRA, include that amount to make up what was withheld. If you do not, the 10% that was withheld will be considered an early withdrawal and have a 10% penalty and tax on it.

In other words, send the entire $11.10 to Roth IRA, not the amount they sent you in a check.

It's not that the penalty and tax is so much, it's to avoid the paperwork you have to do on your taxes to deal with the early withdrawal.

HomeStretch
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Re: Can you help me clean up my Roth IRA mess?

Post by HomeStretch » Mon Jun 24, 2019 9:58 am

peterwantstosave wrote:
Mon Jun 24, 2019 9:27 am
Super. That's what I figured. Any downside to this for me? Thank you. P
None that I am aware of.

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Mon Jun 24, 2019 10:16 am

I have a community of financial advisers around me, how lucky I am :-)

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Mon Jun 24, 2019 7:09 pm

Evening update: Wells Fargo will close the account and use the $39.75 as the termination fee. No distribution. This was the best option, which I negotiated instead of having to add money to get the account up to $95 (their usual cancellation fee). Thanks to this group for teaching me the right vocabulary for negotiation. P

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Mon Jun 24, 2019 7:14 pm

peterwantstosave wrote:
Mon Jun 24, 2019 7:09 pm
Evening update: Wells Fargo will close the account and use the $39.75 as the termination fee. No distribution. This was the best option, which I negotiated instead of having to add money to get the account up to $95 (their usual cancellation fee). Thanks to this group for teaching me the right vocabulary for negotiation. P
Well that's probably a win.

But SHAME ON THEM for letting a person open an account with less money than it takes to close it. Not an honorable business practice in my opinion.

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Mon Jun 24, 2019 7:22 pm

Agreed. It is deeply shameful.

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Tue Jun 25, 2019 6:11 am

Morning update:

Schwab will close my account and write off the $3.67. This was the best option (I think) because they wanted to take 10% mandatory withdrawal for takes, (36 cents) and I told them to close it and write it off instead.

More news as it happens. Thank you all.

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Tue Jun 25, 2019 7:59 am

Here's a scoreboard
  • Ally Invest $1 ($1 contribution) (Contribution Year: 2017)....written off
    Charles Schwab $3.68 ($3 contribution) (Contribution Year: 2017)....written off
    Wells Fargo $39.75 ($39 contribution) (Contribution Year: 2018)....account closed
    Parnassus $618.25 ($589.99 contribution) (Contribution Year: 2019)
    TIAA $1,367.39 ($1188.53 contribution) (Contribution Years: 2017 & 2018)
    Vanguard $5,465.66 ($3305.74 contribution) (Contribution Years: 2018 & 2019)

    ETrade traditional IRA $11.10 ---> 60 day rollover/conversion to Roth IRA in progress (does not count as your "one per year")
You're making progress :D

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Tue Jun 25, 2019 3:40 pm

Retiredjg, I should hire you as my agent ;-)

thanks all for the help and insight

P

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Tue Jun 25, 2019 4:00 pm

Afternoon update: Initiated the Parnassus to Vanguard transfer, paperwork required (unfortunately) with a medallion signature guarantee. Going to get the medallion tomorrow.

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Tue Jun 25, 2019 4:10 pm

peterwantstosave wrote:
Tue Jun 25, 2019 4:00 pm
Afternoon update: Initiated the Parnassus to Vanguard transfer, paperwork required (unfortunately) with a medallion signature guarantee. Going to get the medallion tomorrow.
A medallion guarantee can be difficult to get and it is ludicrous to require it for $618.25. If required, it is the losing custodian (Parnassus) that requires it, not the gaining custodian (Vanguard). Go ahead and give it a try, but be prepared to give those folks holy heck for asking for that on such a tiny balance.

On the other hand, if you are talking about paperwork you got from Vanguard, the fact that they have a place for a medallion signature guarantee does not mean it is required to actually get one. It can be nothing more than a place for a medallion guarantee if one is actually required.

If that (the fact that the form has a place for it) is what you are talking about, ignore it until Parnassus says they want one. Seems unlikely they will want one. Just leave that part of the paperwork blank and go forward as if they did not ask for it.

02nz
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Re: Can you help me clean up my Roth IRA mess?

Post by 02nz » Tue Jun 25, 2019 4:17 pm

retiredjg wrote:
Mon Jun 24, 2019 7:14 pm
peterwantstosave wrote:
Mon Jun 24, 2019 7:09 pm
Evening update: Wells Fargo will close the account and use the $39.75 as the termination fee. No distribution. This was the best option, which I negotiated instead of having to add money to get the account up to $95 (their usual cancellation fee). Thanks to this group for teaching me the right vocabulary for negotiation. P
Well that's probably a win.

But SHAME ON THEM for letting a person open an account with less money than it takes to close it. Not an honorable business practice in my opinion.
Wells Fargo hasn't been known for honorable business practices lately, their TV marketing blitz notwithstanding.

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Tue Jun 25, 2019 8:04 pm

retiredjg wrote:
Tue Jun 25, 2019 4:10 pm
peterwantstosave wrote:
Tue Jun 25, 2019 4:00 pm
Afternoon update: Initiated the Parnassus to Vanguard transfer, paperwork required (unfortunately) with a medallion signature guarantee. Going to get the medallion tomorrow.
A medallion guarantee can be difficult to get and it is ludicrous to require it for $618.25. If required, it is the losing custodian (Parnassus) that requires it, not the gaining custodian (Vanguard). Go ahead and give it a try, but be prepared to give those folks holy heck for asking for that on such a tiny balance.

On the other hand, if you are talking about paperwork you got from Vanguard, the fact that they have a place for a medallion signature guarantee does not mean it is required to actually get one. It can be nothing more than a place for a medallion guarantee if one is actually required.

If that (the fact that the form has a place for it) is what you are talking about, ignore it until Parnassus says they want one. Seems unlikely they will want one. Just leave that part of the paperwork blank and go forward as if they did not ask for it.
Thanks for your insight. I was able to get the medallion signature guarantee tonight at my local CU branch no problem. They were very friendly. The whole process took a bit of time but they were pleasant and even gave me food and drink while I waited. It will go into tomorrow's mail. (I'm not sure if it's NEEDED to have the MED SIG GUARANTEE, but I have it and when VG receives my completed paperwork in the mail, they can use it if they need it). Onward!

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Wed Jun 26, 2019 5:40 am

Interesting.

Are you sure what you got is a Medallion Signature guarantee rather than simply having your signature notarized? They are not the same thing and getting the Medallion signature guarantee by dropping in at a CU branch seems somewhat unlikely from what has been discussed here for the last several years.

I think you are fine either way, just curious.

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Wed Jun 26, 2019 7:51 am

Good morning and thanks all for your continued interest.

Yeah, I am sure. It took about 45 minutes, because there was only one guy "qualified to give the medallion signature guarantee" and he was busy with other things. I figure he was the manager. I signed it in his presence, he filled the medallion box with a medallion stamp, and it looks like all is good to go.

I had to do a medallion signature guarantee once for something else, and I remember it being a similar to-do. Institutions sure do like their rituals LOL

fposte
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Re: Can you help me clean up my Roth IRA mess?

Post by fposte » Wed Jun 26, 2019 8:02 am

retiredjg wrote:
Wed Jun 26, 2019 5:40 am
Interesting.

Are you sure what you got is a Medallion Signature guarantee rather than simply having your signature notarized? They are not the same thing and getting the Medallion signature guarantee by dropping in at a CU branch seems somewhat unlikely from what has been discussed here for the last several years.

I think you are fine either way, just curious.
It's much the same for the medallion signature at my credit union. That's one of the reasons I've kept an account there, in fact. Maybe this is one of the secret differences between CUs and banks?

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Wed Jun 26, 2019 8:25 am

I think fposte is probably correct, but I also think good service is good service, whether at a bank or a credit union.

So, in the meantime as I do all this, I also cashed out and closed a TNSTARS 529 account (in my name, with me as beneficiary). Cashed out to my checking account.

Here are the specifics:

TNSTARS 529 $25.19 (2019 contribution of $25, $0.19 cents growth).

Three questions:

1) I believe I have to pay taxes on this growth, and I think I get to keep my contribution. Is that correct?
2) What should I do with this money?
3) Is it also eligible to be rolled into the VG ROTH IRA, when I roll the Etrade Trad IRA in there?

Thanks in advance, Peter

HomeStretch
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Re: Can you help me clean up my Roth IRA mess?

Post by HomeStretch » Wed Jun 26, 2019 8:59 am

You will get a tax form for the 529 distribution that will be reported on your tax return. If you did not have any qualified educational expenses, you will pay taxes and a 10% penalty on the earnings of $0.19.

You can leave it in checking or add it to a high yield savings account or invest in your taxable brokerage account.

It cannot be rolled over to a Roth IRA. You can use it to fund your Roth IRA contribution up to normal compensation/contribution limits.

Nice job cleaning up your accounts. Hopefully you have cleaned up all your various small balance accounts. Simplicity is good and sometimes less costly. You really don’t need more than one account each for checking, savings, taxable brokerage, HSA, roth IRA, 401k, etc.

Edited for typo

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Wed Jun 26, 2019 10:38 am

Pretty amazing. We've have a number of threads about people who were desperate to get Medallion signatures and were literally not able to get one.

Lucky you!

Topic Author
peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Wed Jun 26, 2019 11:04 am

I'm grateful for your help, retiredjg and all.

A couple more questions:

1) I have a 30Y Bond that I've been meaning to cash out early. It still has about 25Y on it. It has a $100 Face Value. The Treasury sent me a form to do it. I seem to remember that I can transfer that into a taxable brokerage account at Vanguard, am I remembering that right?

2) Should I contact my employer to see what (if anything) I can do with that annuity? It has about 7K in it at the moment, about half of which is growth. I still work there, but I am no longer contributing to the annuity. I only contributed to it my first year. If I am able to move it, where should I move it? Vanguard Trad IRA to avoid taxes?

3) How much should I automate monthly into my taxable brokerage account (VTSAX/VTI)--$100? (Background: I make 50k a year gross, $10K EF @ CU, paid for house, no debt, contributing 15% to Roth 403b (+4% emp match into Roth 403b)). Should I try to max out my Roth IRA before taxable brokerage investing? If I'm remembering the Bogleheads guide correctly, the answer is yes.

P

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Wed Jun 26, 2019 11:30 am

Can't help with the first two questions.

For most people, a taxable account is not needed or recommended for retirement money until you have filled both a 401k (or other work plan) and an IRA (usually Roth IRA).

If you are gathering money for a purchase (car or downpayment) or a wedding or some big travel vacation, you would obviously use the taxable account for that.

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peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Wed Jun 26, 2019 11:53 am

thanks, retiredjg, you are a true asset to the bogleheads community and to me.

P

HomeStretch
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Re: Can you help me clean up my Roth IRA mess?

Post by HomeStretch » Wed Jun 26, 2019 1:16 pm

peterwantstosave wrote:
Wed Jun 26, 2019 11:04 am
I'm grateful for your help, retiredjg and all.

A couple more questions:

1) I have a 30Y Bond that I've been meaning to cash out early. It still has about 25Y on it. It has a $100 Face Value. The Treasury sent me a form to do it. I seem to remember that I can transfer that into a taxable brokerage account at Vanguard, am I remembering that right?
Here’s a link to Treasury Direct’s FAQs about transfers of Treasury Bonds (n/a for EE Bonds and I Bonds).
https://www.treasurydirect.gov/indiv/re ... d_sell.htm

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peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Wed Jun 26, 2019 2:21 pm

Thank you, HomeStretch,

Afternoon update: I've started the TIAA Roth IRA transfer online into my Roth IRA at Vanguard.

I've also completed the TreasDir paperwork and am putting it into an envelope.

Thank you all.

Peter

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peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Tue Jul 02, 2019 12:57 pm

Friends,

I've received the ETrade Check for the whopping sum of $9.99

It had been in a Trad IRA there, what's the easiest way to transfer it to my VG Roth IRA?

Should I deposit it into my checking account and then do a 60-day roll over from there?

It's a physical check, dated June 24, 2019

Thanks in advance, Peter

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CAsage
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Re: Can you help me clean up my Roth IRA mess?

Post by CAsage » Tue Jul 02, 2019 7:36 pm

peterwantstosave wrote:
Tue Jul 02, 2019 12:57 pm
It had been in a Trad IRA there, what's the easiest way to transfer it to my VG Roth IRA?

Should I deposit it into my checking account and then do a 60-day roll over from there?
Thanks in advance, Peter
That would be a conversion (T-IRA to Roth), so deposit the check, then write a check to the Roth? It might be taxable if they actually issue a 1099-R for under $10. Or forget it...
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Wed Jul 03, 2019 6:57 am

peterwantstosave wrote:
Tue Jul 02, 2019 12:57 pm
Friends,

I've received the ETrade Check for the whopping sum of $9.99

It had been in a Trad IRA there, what's the easiest way to transfer it to my VG Roth IRA?

Should I deposit it into my checking account and then do a 60-day roll over from there?

It's a physical check, dated June 24, 2019

Thanks in advance, Peter
Yes. Put that check in your checking account. Then do a 60 day rollover of the entire amount ($11.10) to Roth IRA. Call Vanguard or find the paperwork on their website for how to do this. You will send them a check for $11.10 and the appropriate paperwork making sure they know this is a tIRA to Roth IRA rollover (or conversion).

You can just as easily leave the money in your checking account and forget the rollover/conversion....but if you do, you'll have to figure out how to deal with an early withdrawal of $11.10 from your tIRA which will trigger tax and 10% penalty.

I'd rather send the check to my Roth IRA than do that on my taxes. But you might make a different choice. Either one solves your problem.

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Wiggums
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Re: Can you help me clean up my Roth IRA mess?

Post by Wiggums » Wed Jul 03, 2019 7:09 am

I’m glad that you asked this question. I learned a lot. It sounds like you simplified your accounts and made the most if this situation.

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peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Wed Jul 03, 2019 10:43 am

thanks retiredjg and Wiggums. (like from the Simpsons?)

I will roll it over on VG's website.

One more question, and that's really all it is:

Does anyone do customer service better than Vanguard?

Whenever I call them, they make me feel stupid. I may just be too sensitive, but my questions are all fairly basic.

I love Vanguard funds, but I am not a fan of their customer service at all.

Peter

HomeStretch
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Re: Can you help me clean up my Roth IRA mess?

Post by HomeStretch » Wed Jul 03, 2019 10:54 am

As you get more investing experience, you will probably have less interaction so less issues with Vanguard CS.

That said, Fidelity CS is 24/7 and very helpful plus they have walk-in offices. You most likely will never feel stupid because no matter what question you ask, they will always say “that’s a good question...” as a lead in to their answer.

That said, it’s a dual edge sword as I never want to hear “that’s a good question” to a request for actively-managed funds, AUM accounts, high-fee annuities, etc. I suspect I might hear that from Fidelity but I think I would be less likely to hear that from Vanguard (except for their routine push for VPAS).

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Wed Jul 03, 2019 11:09 am

peterwantstosave wrote:
Wed Jul 03, 2019 10:43 am
Does anyone do customer service better than Vanguard?
It is said that Fidelity and Schwab both have better customer service than Vanguard. But....

Whenever I call them, they make me feel stupid. I may just be too sensitive, but my questions are all fairly basic.
I'm not sure that any other company's reps would have done much better with the nature of your questions. It may have seemed funny to them because rollovers of such tiny amounts are...unusual. :happy And when you are 45 or 50, you may look back and see the humor as well.

After all this, why not let it ride for a year or so and then move the Roth IRA later if you decide you are not a happy customer later on.

I never talk to Vanguard and you may find that you don't need to either as you get more experience.

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peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Wed Jul 03, 2019 11:33 am

thank you both, i will hang on for a year or so and see how i feel

appreciatively

p

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peterwantstosave
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Re: Can you help me clean up my Roth IRA mess?

Post by peterwantstosave » Thu Jul 04, 2019 5:48 am

Friends,

I've placed the $9.99 check into my checking account, the check has cleared, and I've electronically sent the $11.10 to VTSAX in my Roth IRA. I indicated that the transfer was from a non-roth Rollover. Am I done? Can it be? What will I do with all my free time?

THANK YOU. You're bringing me a lot of peace when it comes to investing, and I am grateful.

Peter

Chip
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Re: Can you help me clean up my Roth IRA mess?

Post by Chip » Thu Jul 04, 2019 6:27 am

retiredjg wrote:
Wed Jun 26, 2019 10:38 am
Pretty amazing. We've have a number of threads about people who were desperate to get Medallion signatures and were literally not able to get one.
I guess it depends on the customs and practices where one lives. My local bank has no problem giving medallion guarantees, though it's via the "investment guy" in the bank branch. A different person is the notary.

Different story for a relative in California. Couldn't even get something notarized at a B of A branch. Yet another reason why B of A is high on my enemies list. :D

retiredjg
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Re: Can you help me clean up my Roth IRA mess?

Post by retiredjg » Thu Jul 04, 2019 6:44 am

peterwantstosave wrote:
Thu Jul 04, 2019 5:48 am
...and I've electronically sent the $11.10 to VTSAX in my Roth IRA. I indicated that the transfer was from a non-roth Rollover. Am I done?
Interesting. I didn't know it could be done that way.

Can it be? What will I do with all my free time?
You can twiddle your thumbs until the Parnassus and TIAA checks show up in your Roth IRA?

THANK YOU. You're bringing me a lot of peace when it comes to investing, and I am grateful.
You did all the work. :happy

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