Vanguard IRA Contribution Frustrations

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NYCaviator
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Vanguard IRA Contribution Frustrations

Post by NYCaviator »

I sold $6,000 of a fund in our vanguard brokerage account. It has fully settled and in our settlement fund. I want to use this $6,000 to fund an IRA that we will then convert to a Roth. Vanguard will not let me move the money from the brokerage account settlement fund to the IRA. The only option to contribute is from a bank account or sending a check to Vanguard.

Is this normal? Is there another way to contribute to the IRA without first transferring the money to my checking from brokerage and then re-transferring back to the IRA? Seems like a lot of extra steps for something that should be really simple.
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RickBoglehead
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Re: Vanguard IRA Contribution Frustrations

Post by RickBoglehead »

Yes, that is normal. Once you setup an IRA, and leave the setup (i.e. don't contribute), you should be able to log into the site, and then click on Contribute to an IRA. When the From area appears, pick the drop down menu and another fund option, and then it should shift to coming out of a fund and going to the IRA.
Last edited by RickBoglehead on Fri Jul 30, 2021 7:20 am, edited 1 time in total.
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David Jay
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Re: Vanguard IRA Contribution Frustrations

Post by David Jay »

That feels strange. Is the destination IRA a brokerage-style account (not a legacy mutual fund account)?

Did you try the “buy” function in the taxable account? That is what I use to move money from one account to another. With a browser or IOS app, I can “buy” in a different account. I have not done a tIRA purchase, but I have used it between taxable accounts, done distributions (both tIRA and Roth) as well as Roth conversions.
Last edited by David Jay on Fri Jul 30, 2021 7:22 am, edited 2 times in total.
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chemocean
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Re: Vanguard IRA Contribution Frustrations

Post by chemocean »

You mention "we", but IRA's are individual accounts. It sounds like you are trying to move money from an account in one person's name (not joint account) to an IRA account in another person's name. Vanguard only transfers funds internally between accounts that have a common owner. "We" ran into the same issue when trying to use dividend funds from one sole owner account to buy shares in another sole owner account. Had to sent to and from an external joint account in both our names, like you were instructed to do.
If the settlement account is a sole owner account, do you have a joint Vanguard account to move the funds, then move to the IRA with a common owner as the joint account
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NYCaviator
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Re: Vanguard IRA Contribution Frustrations

Post by NYCaviator »

RickBoglehead wrote: Fri Jul 30, 2021 7:14 am Yes, that is normal. Once you setup an IRA, and leave the setup (i.e. don't contribute), you should be able to log into the site, and then click on Contribute to an IRA. When the From area appears, pick the drop down menu and another fund option, and then it should shift to coming out of a fund and going to the IRA.
All of the funds in the Brokerage are greyed out. The only option is for me to move money from my bank accounts.
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NYCaviator
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Re: Vanguard IRA Contribution Frustrations

Post by NYCaviator »

chemocean wrote: Fri Jul 30, 2021 7:22 am You mention "we", but IRA's are individual accounts. It sounds like you are trying to move money from an account in one person's name (not joint account) to an IRA account in another person's name. Vanguard only transfers funds internally between accounts that have a common owner. "We" ran into the same issue when trying to use dividend funds from one sole owner account to buy shares in another sole owner account. Had to sent to and from an external joint account in both our names, like you were instructed to do.
If the settlement account is a sole owner account, do you have a joint Vanguard account to move the funds, then move to the IRA with a common owner as the joint account
Its going from joint brokerage to spouse's tIRA. Both names are on the brokerage and spouse is on the tIRA.
cas
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Re: Vanguard IRA Contribution Frustrations

Post by cas »

NYCaviator wrote: Fri Jul 30, 2021 8:19 am Its going from joint brokerage to spouse's tIRA. Both names are on the brokerage and spouse is on the tIRA.
From whose login is this being attempted?

Unless you have set up appropriate agent authorizations, I don't think you can't be logged in as you and move assets from the joint account to your spouse's IRA. Your spouse would have to log in to do that.

Although I get a "You don't have authorization to do this" pop-up message when I inadvertently try things of this sort. But I have the old mutual fund platform accounts....
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RickBoglehead
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Re: Vanguard IRA Contribution Frustrations

Post by RickBoglehead »

NYCaviator wrote: Fri Jul 30, 2021 8:19 am Its going from joint brokerage to spouse's tIRA. Both names are on the brokerage and spouse is on the tIRA.
Without agent authorization, your spouse will need to log in to your joint account, then do the transfer.
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NYCaviator
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Re: Vanguard IRA Contribution Frustrations

Post by NYCaviator »

RickBoglehead wrote: Fri Jul 30, 2021 9:06 am
NYCaviator wrote: Fri Jul 30, 2021 8:19 am Its going from joint brokerage to spouse's tIRA. Both names are on the brokerage and spouse is on the tIRA.
Without agent authorization, your spouse will need to log in to your joint account, then do the transfer.
I think I should have it because I can transfer money from our checking account, just not from our joint brokerage.
nalor511
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Re: Vanguard IRA Contribution Frustrations

Post by nalor511 »

NYCaviator wrote: Fri Jul 30, 2021 3:21 pm
RickBoglehead wrote: Fri Jul 30, 2021 9:06 am
NYCaviator wrote: Fri Jul 30, 2021 8:19 am Its going from joint brokerage to spouse's tIRA. Both names are on the brokerage and spouse is on the tIRA.
Without agent authorization, your spouse will need to log in to your joint account, then do the transfer.
I think I should have it because I can transfer money from our checking account, just not from our joint brokerage.
Stop thinking about how you think it should work, and do it how it's letting you. Transfer from the settlement to the bank, and from the bank to the IRA, and be done with it.
livesoft
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Re: Vanguard IRA Contribution Frustrations

Post by livesoft »

I'd solve this with a phone call. It seems it has been about 8 hours since the start of the thread.
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nix4me
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Re: Vanguard IRA Contribution Frustrations

Post by nix4me »

Vanguard never left the 1980's. I had similar issues trying to add a "Joint" bank account to a "Joint" Brokerage account.
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David Jay
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Re: Vanguard IRA Contribution Frustrations

Post by David Jay »

RickBoglehead wrote: Fri Jul 30, 2021 9:06 am
NYCaviator wrote: Fri Jul 30, 2021 8:19 am Its going from joint brokerage to spouse's tIRA. Both names are on the brokerage and spouse is on the tIRA.
Without agent authorization, your spouse will need to log in to your joint account, then do the transfer.
I agree, I always have to log out of my session and log in as my spouse to do anything with her Roth. (I can see her Roth account in my session as a family member, but not transact).
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MahoningValley
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Re: Vanguard IRA Contribution Frustrations

Post by MahoningValley »

"I agree, I always have to log out of my session and log in as my spouse to do anything with her Roth. (I can see her Roth account in my session as a family member, but not transact)."

Ditto here, the joint acct shows up on her session and you work from there.
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Eagle33
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Re: Vanguard IRA Contribution Frustrations

Post by Eagle33 »

MahoningValley wrote: Fri Jul 30, 2021 7:38 pm "I agree, I always have to log out of my session and log in as my spouse to do anything with her Roth. (I can see her Roth account in my session as a family member, but not transact)."

Ditto here, the joint acct shows up on her session and you work from there.
There are at least 2 different levels of agent authorization at Vanguard. You need Full Agent Authorization to get the most access to another's accounts (only certain accounts). Though even that has some limits. If the action is not on the below list, then assume it can't be done by the agent, but try just to confirm.

List of what agent can do with Full Agent Authorization:
• Change your address or your bank account information.
• Change your beneficiary designations—even designate himself or herself as beneficiary.
• Buy, sell, and exchange Vanguard mutual funds.
• Buy, sell, and trade in stocks, bonds, and other securities.
• Engage in margin and/or option trading.
• Obtain information on your accounts.
• Redeem your assets and have the proceeds mailed in anyone’s name, including the agent’s.
• Transfer your assets to a new or different registration.
• View beneficiary information online.*
• View statements online.*
• Write checks on your accounts.
• Access all your statements and transaction history—even from years prior to the agent’s appointment.
• Open a new brokerage account or sign a new account application.
• Sign any tax information or reporting form required by federal or state taxing authorities.
• Conduct all other lawful transactions on your account.

Accounts that allow full agent access:
• Individually owned nonretirement accounts.
• IRAs (traditional, Roth, SEP, SIMPLE, rollover,
and inherited).
• Joint accounts.

Accounts that don’t allow full agents:
• Individual 401(k) and Individual Roth 401(k) accounts.
• UGMA/UTMA accounts, custodial accounts, and education savings accounts.
• Trust accounts.
• Organization and corporate accounts.
• Vanguard Brokerage Option for employer-sponsored retirement plans.
• ERISA and non-ERISA 403(b)(7) accounts
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greenhorn401
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Re: Vanguard IRA Contribution Frustrations

Post by greenhorn401 »

NYCaviator wrote: Fri Jul 30, 2021 6:57 am I sold $6,000 of a fund in our vanguard brokerage account. It has fully settled and in our settlement fund. I want to use this $6,000 to fund an IRA that we will then convert to a Roth. Vanguard will not let me move the money from the brokerage account settlement fund to the IRA. The only option to contribute is from a bank account or sending a check to Vanguard.

Is this normal? Is there another way to contribute to the IRA without first transferring the money to my checking from brokerage and then re-transferring back to the IRA? Seems like a lot of extra steps for something that should be really simple.
I asked Vanguard CSR this question a while back, and was told that for IRA contribution, it has to be in "cash". Vanguard wants the contribution to come from a source where the dollar amount is fixed and cannot fluctuate. Apparently, their own settlement fund, which is a money market mutual fund that maintains $1 NAV doesn't count. It doesn't matter if you have more than the required money in the settlement account to cover the contribution.

Like nalor511 said, it wasn't something worth fighting for me so I did it from a bank.
Housedoc
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Re: Vanguard IRA Contribution Frustrations

Post by Housedoc »

I contributed 3,000 out of my settlement fund to my son's Roth IRA by just making a phone call to Vanguard. Make it easy on yourself and pick up the phone.
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