Can you do backdoor Roth conversions between brokers (Fidelity to Schwab)?

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jmn1226
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Can you do backdoor Roth conversions between brokers (Fidelity to Schwab)?

Post by jmn1226 »

[Moved into a new thread from: Can we do both backdoor Roth IRA and mega backdoor Roth IRA --admin LadyGeek]

This thread has been super helpful for someone new to the concept of mega-backdoors. One question I can not find and answer to, and maybe this is vendor specific, but if your after tax contributions are happening via 1 vendor where your 401K is (lets say Fidelity), but you have an exiting ROTH account somewhere else (lets say Schwab), is there a way to convert the contributions from Fidelity to Schwab or would it be better to open a Roth with Fidelity (and maybe even consolidate by moving existing Schwab ROTH there)?
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LadyGeek
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Re: Can you do backdoor Roth conversions between brokers (Fidelity to Schwab)?

Post by LadyGeek »

Welcome! I moved your question into a new thread.

On an administrative note, Roth is not an acronym. It's the name of the US Senator. See the wiki: Roth IRA
Named after US Senator William Roth, Roth IRAs were established by the Taxpayer Relief Act of 1997.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
Silk McCue
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Re: Can you do backdoor Roth conversions between brokers (Fidelity to Schwab)?

Post by Silk McCue »

Just open a Roth at Fidelity. There is no need to use your existing Roth at another brokerage.

To be clear his would be a Mega Backdoor Roth not a Backdoor Roth. Those are similar but different processes.

This Wiki describes the Mega Backdoor Roth and discusses the difference between that and a Backdoor Roth.

FYI - Roth, not ROTH.

https://www.bogleheads.org/wiki/Mega-backdoor_Roth

Cheers
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jmn1226
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Re: Can you do backdoor Roth conversions between brokers (Fidelity to Schwab)?

Post by jmn1226 »

Thanks - understood. Iv'e been doing backdoor Roth for years on the Schwab account, but just starting the mega this year. Thanks for the advice.
Silk McCue wrote: Wed Aug 03, 2022 7:16 pm Just open a Roth at Fidelity. There is no need to use your existing Roth at another brokerage.

To be clear his would be a Mega Backdoor Roth not a Backdoor Roth. Those are similar but different processes.

This Wiki describes the Mega Backdoor Roth and discusses the difference between that and a Backdoor Roth.

FYI - Roth, not ROTH.

https://www.bogleheads.org/wiki/Mega-backdoor_Roth

Cheers
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Duckie
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Re: Can you do backdoor Roth conversions between brokers (Fidelity to Schwab)?

Post by Duckie »

jmn1226 wrote: Wed Aug 03, 2022 6:31 pm if your after tax contributions are happening via 1 vendor where your 401K is (lets say Fidelity), but you have an exiting ROTH account somewhere else (lets say Schwab), is there a way to convert the contributions from Fidelity to Schwab
Yes. You are allowed to roll after-tax 401k assets held at Vendor 1 to a personal Roth IRA held at Vendor 2. So in your case you could transfer your after-tax 401k assets at Fidelity to a Roth IRA at Schwab.
would it be better to open a Roth with Fidelity (and maybe even consolidate by moving existing Schwab ROTH there)?
It would be easier if the 401k custodian brokerage were the same as the Roth IRA custodian brokerage. Since Fidelity is a good brokerage with many low-cost fund options there is no downside to opening a Roth IRA there. Consolidating would make things simpler.
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retiredjg
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Re: Can you do backdoor Roth conversions between brokers (Fidelity to Schwab)?

Post by retiredjg »

I too believe things are a lot easier and faster if you have the Roth IRA at Fidelity where the 401k is. If you actually prefer Schwab, just do a transfer from the Fidelity Roth IRA to the Schwab Roth IRA once a year or so.
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Re: Can you do backdoor Roth conversions between brokers (Fidelity to Schwab)?

Post by placeholder »

You can roll the after tax to any roth you want and in fact for a long time megacorp's 401k was managed by a company that didn't even have retail brokerage accounts although there are often advantages to using the same if possible like doing electronic versus checks.
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