Which brokerage is best for backdoor Roth

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sto
Posts: 4
Joined: Tue Jan 02, 2018 8:06 pm

Which brokerage is best for backdoor Roth

Post by sto » Fri Jul 13, 2018 9:46 pm

Hi,

Did some search but didn't found answers. Which bank has the most seamless and simple process for open tIRA and backdoor Roth convert? I prefer the bank don't need call or mail paperwork. Also, I have already brokerage accounts on eTrade, Schwab, and Fidelity.

Thanks,
Last edited by sto on Fri Jul 13, 2018 10:52 pm, edited 1 time in total.

Silk McCue
Posts: 1120
Joined: Thu Feb 25, 2016 7:11 pm

Re: Which bank is best for backdoor Roth

Post by Silk McCue » Fri Jul 13, 2018 10:03 pm

I expect it would be very easy to do at either Schwab or Fidelity since you have brokerage accounts there. I personally wouldn’t use a bank for this purpose given the limited investment options.

Cheers

sto
Posts: 4
Joined: Tue Jan 02, 2018 8:06 pm

Re: Which bank is best for backdoor Roth

Post by sto » Fri Jul 13, 2018 10:53 pm

Silk McCue wrote:
Fri Jul 13, 2018 10:03 pm
I expect it would be very easy to do at either Schwab or Fidelity since you have brokerage accounts there. I personally wouldn’t use a bank for this purpose given the limited investment options.

Cheers
Thanks

MDCrab
Posts: 9
Joined: Mon May 07, 2018 4:39 pm

Re: Which brokerage is best for backdoor Roth

Post by MDCrab » Fri Jul 13, 2018 11:26 pm

I did it with Vanguard this year. Only a few minutes. No phone calls. No paperwork.

krafty81
Posts: 28
Joined: Thu Jul 05, 2018 2:01 pm
Location: San Diego, CA

Re: Which brokerage is best for backdoor Roth

Post by krafty81 » Sat Jul 21, 2018 7:32 pm

Schwab was easy but my (former) tax accountant screwed it up royally on both my federal and state income tax returns. New tax guy found the problem, I got a hefty check from USG and California. Just a reminder to ensure your accountant does it right on your return! :annoyed

viz
Posts: 95
Joined: Fri May 04, 2018 11:22 pm

Re: Which brokerage is best for backdoor Roth

Post by viz » Sat Jul 21, 2018 7:34 pm

sto wrote:
Fri Jul 13, 2018 9:46 pm
Hi,

Did some search but didn't found answers. Which bank has the most seamless and simple process for open tIRA and backdoor Roth convert? I prefer the bank don't need call or mail paperwork. Also, I have already brokerage accounts on eTrade, Schwab, and Fidelity.

Thanks,
I did it with Merrill Edge. It was done online and took few minutes to submit the request. It took about 3 days for the actual conversion to go through

retiredjg
Posts: 33588
Joined: Thu Jan 10, 2008 12:56 pm

Re: Which brokerage is best for backdoor Roth

Post by retiredjg » Sat Jul 21, 2018 7:48 pm

I would not hold an IRA at a bank under most circumstances. You should be able to open an IRA at any of the places you currently have accounts - eTrade, Schwab, and Fidelity.

I'd probably use Fidelity because I like their funds best of those three.

supalong52
Posts: 110
Joined: Tue Feb 09, 2010 1:51 pm

Re: Which brokerage is best for backdoor Roth

Post by supalong52 » Sat Jul 21, 2018 7:54 pm

I have done it with two brokerages -- Scottrade and Vanguard. With Scottrade, I always had to go into the branch and fill out forms. With Vanguard, it was as simple as a few clicks.

CedarWaxWing
Posts: 594
Joined: Sun Nov 02, 2014 12:24 pm

Re: Which brokerage is best for backdoor Roth

Post by CedarWaxWing » Sat Jul 21, 2018 7:57 pm

krafty81 wrote:
Sat Jul 21, 2018 7:32 pm
Schwab was easy but my (former) tax accountant screwed it up royally on both my federal and state income tax returns. New tax guy found the problem, I got a hefty check from USG and California. Just a reminder to ensure your accountant does it right on your return! :annoyed
A CPA or not?

NoHeat
Posts: 166
Joined: Sun Sep 18, 2016 10:13 am

Re: Which brokerage is best for backdoor Roth

Post by NoHeat » Sat Jul 21, 2018 8:12 pm

viz wrote:
Sat Jul 21, 2018 7:34 pm
I did it with Merrill Edge. It was done online and took few minutes to submit the request. It took about 3 days for the actual conversion to go through
A hassle at MerrillEdge, but not Vanguard, is that ME closed my empty Traditional IRA account in less than 12 months. So even though everything went well my first year at ME, in my second year, when I wanted to start a backdoor again, I couldn’t until I filled out paperwork to apply for a new empty IRA, which was an unwanted hassle.

My ME advisor suggested that as a workaround, I must leave $100 in the Traditional IRA, and not convert it all to Roth, so that the Traditional account will not be closed. And so I did that in my 2nd year at ME, and it worked — my 3rd year conversion went off without a hitch.

I never had this problem at Vanguard, where they allowed an empty Traditional IRA account to remain available 12 months later.

student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Re: Which brokerage is best for backdoor Roth

Post by student » Sat Jul 21, 2018 8:22 pm

NoHeat wrote:
Sat Jul 21, 2018 8:12 pm
viz wrote:
Sat Jul 21, 2018 7:34 pm
I did it with Merrill Edge. It was done online and took few minutes to submit the request. It took about 3 days for the actual conversion to go through
A hassle at MerrillEdge, but not Vanguard, is that ME closed my empty Traditional IRA account in less than 12 months. So even though everything went well my first year at ME, in my second year, when I wanted to start a backdoor again, I couldn’t until I filled out paperwork to apply for a new empty IRA, which was an unwanted hassle.

My ME advisor suggested that as a workaround, I must leave $100 in the Traditional IRA, and not convert it all to Roth, so that the Traditional account will not be closed. And so I did that in my 2nd year at ME, and it worked — my 3rd year conversion went off without a hitch.

I never had this problem at Vanguard, where they allowed an empty Traditional IRA account to remain available 12 months later.
Will the $100 cause additional paperwork in tax return?

SVT
Posts: 227
Joined: Mon Oct 13, 2008 8:56 am

Re: Which brokerage is best for backdoor Roth

Post by SVT » Sat Jul 21, 2018 8:26 pm

viz wrote:
Sat Jul 21, 2018 7:34 pm
sto wrote:
Fri Jul 13, 2018 9:46 pm
Hi,

Did some search but didn't found answers. Which bank has the most seamless and simple process for open tIRA and backdoor Roth convert? I prefer the bank don't need call or mail paperwork. Also, I have already brokerage accounts on eTrade, Schwab, and Fidelity.

Thanks,
I did it with Merrill Edge. It was done online and took few minutes to submit the request. It took about 3 days for the actual conversion to go through
Oh really? Last I heard a year or 2 ago, ME didn't allow conversions online. Had to do it by mail or call in or something like that. Good to know it can be done online now.

NoHeat
Posts: 166
Joined: Sun Sep 18, 2016 10:13 am

Re: Which brokerage is best for backdoor Roth

Post by NoHeat » Sat Jul 21, 2018 9:22 pm

student wrote:
Sat Jul 21, 2018 8:22 pm
NoHeat wrote:
Sat Jul 21, 2018 8:12 pm
viz wrote:
Sat Jul 21, 2018 7:34 pm
I did it with Merrill Edge. It was done online and took few minutes to submit the request. It took about 3 days for the actual conversion to go through
A hassle at MerrillEdge, but not Vanguard, is that ME closed my empty Traditional IRA account in less than 12 months. So even though everything went well my first year at ME, in my second year, when I wanted to start a backdoor again, I couldn’t until I filled out paperwork to apply for a new empty IRA, which was an unwanted hassle.

My ME advisor suggested that as a workaround, I must leave $100 in the Traditional IRA, and not convert it all to Roth, so that the Traditional account will not be closed. And so I did that in my 2nd year at ME, and it worked — my 3rd year conversion went off without a hitch.

I never had this problem at Vanguard, where they allowed an empty Traditional IRA account to remain available 12 months later.
Will the $100 cause additional paperwork in tax return?
Yes, a little bit. As I recall, I had to make an entry in form 8606 to track the basis in a non-deductible Traditional IRA, since it had a balance at year end. That’s a nuisance, but only a small one, because reporting the backdoor conversion requires some entries in that form anyway.

I suppose there could be yet another nuisance in the future when when I eventually withdraw the funds in that nondeductible IRA. In the hope of minimizing that future annoyance, I am leaving the $100 in a low-yielding money market fund.

Overall, I’d say any broker that automatically closes empty IRAs in less than 12 months is going to create this headache. My experience is limited to two brokers, many years at Vanguard where I never experienced this problem, and now three years at ME where I do. For me, this issue is a definite downside for ME, but it’s not bad enough for me to give up the perks of ME premium elite status.

student
Posts: 2524
Joined: Fri Apr 03, 2015 6:58 am

Re: Which brokerage is best for backdoor Roth

Post by student » Sat Jul 21, 2018 9:56 pm

NoHeat wrote:
Sat Jul 21, 2018 9:22 pm
student wrote:
Sat Jul 21, 2018 8:22 pm
NoHeat wrote:
Sat Jul 21, 2018 8:12 pm
viz wrote:
Sat Jul 21, 2018 7:34 pm
I did it with Merrill Edge. It was done online and took few minutes to submit the request. It took about 3 days for the actual conversion to go through
A hassle at MerrillEdge, but not Vanguard, is that ME closed my empty Traditional IRA account in less than 12 months. So even though everything went well my first year at ME, in my second year, when I wanted to start a backdoor again, I couldn’t until I filled out paperwork to apply for a new empty IRA, which was an unwanted hassle.

My ME advisor suggested that as a workaround, I must leave $100 in the Traditional IRA, and not convert it all to Roth, so that the Traditional account will not be closed. And so I did that in my 2nd year at ME, and it worked — my 3rd year conversion went off without a hitch.

I never had this problem at Vanguard, where they allowed an empty Traditional IRA account to remain available 12 months later.
Will the $100 cause additional paperwork in tax return?
Yes, a little bit. As I recall, I had to make an entry in form 8606 to track the basis in a non-deductible Traditional IRA, since it had a balance at year end. That’s a nuisance, but only a small one, because reporting the backdoor conversion requires some entries in that form anyway.

I suppose there could be yet another nuisance in the future when when I eventually withdraw the funds in that nondeductible IRA. In the hope of minimizing that future annoyance, I am leaving the $100 in a low-yielding money market fund.

Overall, I’d say any broker that automatically closes empty IRAs in less than 12 months is going to create this headache. My experience is limited to two brokers, many years at Vanguard where I never experienced this problem, and now three years at ME where I do. For me, this issue is a definite downside for ME, but it’s not bad enough for me to give up the perks of ME premium elite status.
Thanks for the info?

viz
Posts: 95
Joined: Fri May 04, 2018 11:22 pm

Re: Which brokerage is best for backdoor Roth

Post by viz » Sun Jul 22, 2018 1:30 am

SVT wrote:
Sat Jul 21, 2018 8:26 pm
viz wrote:
Sat Jul 21, 2018 7:34 pm
sto wrote:
Fri Jul 13, 2018 9:46 pm
Hi,

Did some search but didn't found answers. Which bank has the most seamless and simple process for open tIRA and backdoor Roth convert? I prefer the bank don't need call or mail paperwork. Also, I have already brokerage accounts on eTrade, Schwab, and Fidelity.

Thanks,
I did it with Merrill Edge. It was done online and took few minutes to submit the request. It took about 3 days for the actual conversion to go through
Oh really? Last I heard a year or 2 ago, ME didn't allow conversions online. Had to do it by mail or call in or something like that. Good to know it can be done online now.
I didn't have to go to a physical location. I was able to do it online. I don't recall if I had to print, sign and scan documents.

viz
Posts: 95
Joined: Fri May 04, 2018 11:22 pm

Re: Which brokerage is best for backdoor Roth

Post by viz » Sun Jul 22, 2018 1:31 am

NoHeat wrote:
Sat Jul 21, 2018 8:12 pm
viz wrote:
Sat Jul 21, 2018 7:34 pm
I did it with Merrill Edge. It was done online and took few minutes to submit the request. It took about 3 days for the actual conversion to go through
A hassle at MerrillEdge, but not Vanguard, is that ME closed my empty Traditional IRA account in less than 12 months. So even though everything went well my first year at ME, in my second year, when I wanted to start a backdoor again, I couldn’t until I filled out paperwork to apply for a new empty IRA, which was an unwanted hassle.

My ME advisor suggested that as a workaround, I must leave $100 in the Traditional IRA, and not convert it all to Roth, so that the Traditional account will not be closed. And so I did that in my 2nd year at ME, and it worked — my 3rd year conversion went off without a hitch.

I never had this problem at Vanguard, where they allowed an empty Traditional IRA account to remain available 12 months later.
Thanks for the info. It would be a hassle. I will know in a year or so as I opened the account recently

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Earl Lemongrab
Posts: 5280
Joined: Tue Jun 10, 2014 1:14 am

Re: Which brokerage is best for backdoor Roth

Post by Earl Lemongrab » Sun Jul 22, 2018 12:03 pm

I have opened several accounts at Merrill Edge. Always online. If you have an existing account, they prefill most of the form boxes. Takes a few minutes total.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

naclt
Posts: 22
Joined: Wed Feb 07, 2018 8:15 am

Re: Which brokerage is best for backdoor Roth

Post by naclt » Sun Jul 22, 2018 12:20 pm

SVT wrote:
Sat Jul 21, 2018 8:26 pm
viz wrote:
Sat Jul 21, 2018 7:34 pm
sto wrote:
Fri Jul 13, 2018 9:46 pm
Hi,

Did some search but didn't found answers. Which bank has the most seamless and simple process for open tIRA and backdoor Roth convert? I prefer the bank don't need call or mail paperwork. Also, I have already brokerage accounts on eTrade, Schwab, and Fidelity.

Thanks,
I did it with Merrill Edge. It was done online and took few minutes to submit the request. It took about 3 days for the actual conversion to go through
Oh really? Last I heard a year or 2 ago, ME didn't allow conversions online. Had to do it by mail or call in or something like that. Good to know it can be done online now.
I did one with ME at the end of last year and had to do via phone. I think they want you to listen to the tax disclaimer. All in all, it took about 10min so not terrible.

honduranhurricane
Posts: 92
Joined: Tue Oct 18, 2016 10:18 pm
Location: boston, ma

Re: Which brokerage is best for backdoor Roth

Post by honduranhurricane » Sun Jul 22, 2018 1:11 pm

Fidelity is very quick and easy. All done on-line.

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