Vanguard glitch / a simple Roth IRA contribution went wrong! What are my options now?

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BogleMelon
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Vanguard glitch / a simple Roth IRA contribution went wrong! What are my options now?

Post by BogleMelon » Mon Feb 11, 2019 3:29 pm

Last week I executed a contribution from our joint Vanguard brokerage account to my Vanguard Roth IRA. This is not the first one this year. But for this one, some weird things happened after the execution:
1- I received a confirmation that I bought the index fund in the Roth IRA
2- I received a confirmation that I sold the Prime MM fund in the taxable (so far so good)
3- (The fun begins) I have an outstanding available balance in my Roth in negative (still hanging there, and equal to what I contributed). As if I bought the index fund on margin!
4- I have an outstanding available POSITIVE balance in my taxable, same amount!
5- My contribution limit for the year is the same before the transaction! Had i didn't catch this mistake, I could easily go over the $6000 limit for the year without even noticing and Vanguard would allow me!

I contacted Vanguard to see what's going on, after being on hold for 20 mins, they said they are not sure why that happened, and they can't reach the resolution guy, but they will open a ticket and keep me posted.
This is not the first time I got that response, last time they did, was regarding my inability to deposit mobile checks, but the issue never resolved till now.
My question is: Has anyone lately went through something similar? Was Vanguard able to solve it easily? And what are my other choices if they failed to fix?
Of course once this gets fixed I will move to Fidelity (Already started moving my wife's account), I had enough with Vanguard.. I love their products (funds), but the glitches is so annoying, and if I am not around (AKA died), I am not sure if my wife would be capable of handling or noticing their mistakes..
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

bloom2708
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Re: Vanguard glitch / a simple Roth IRA contribution went wrong! What are my options now?

Post by bloom2708 » Mon Feb 11, 2019 3:42 pm

There was another thread on this.

You can't do an exchange from a taxable fund directly to your Roth IRA contribution.

1. Sell in taxable, funds go to Settlement account of taxable.
2. Wait for funds to "settle"/be available
3. Buy in Roth, source is the taxable Settlement account.

This is how I do it.

You may be OK if you are still in #2. The waiting for settlement period.

I was not able to let my Roth IRA settlement account go negative. This is how I usually do my Roth contributions at Vanguard.

Is your account set up for margin trading? I would assume you will be able to "settle" the taxable settlement positive with the Roth settlement negative. Best to call Vanguard and ask on this one.
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celia
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Re: Vanguard glitch / a simple Roth IRA contribution went wrong! What are my options now?

Post by celia » Mon Feb 11, 2019 3:46 pm

BogleMelon wrote:
Mon Feb 11, 2019 3:29 pm
2- I received a confirmation that I sold the Prime MM fund in the taxable (so far so good)
4- I have an outstanding available POSITIVE balance in my taxable, same amount!
Is the money coming out of a taxable BROKERAGE account where the Federal Money Market Account is the default settlement account? If so, I think you need to go through the settlement fund into the settlement fund of the Roth (if it is also a brokerage account). Then there may be a 3-day delay (business days) while waiting for the settlement account in either/both accounts.

Does this sound anything like your situation?
Last edited by celia on Mon Feb 11, 2019 3:49 pm, edited 1 time in total.

Topic Author
BogleMelon
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Joined: Mon Feb 01, 2016 11:49 am

Re: Vanguard glitch / a simple Roth IRA contribution went wrong! What are my options now?

Post by BogleMelon » Mon Feb 11, 2019 3:48 pm

bloom2708 wrote:
Mon Feb 11, 2019 3:42 pm
There was another thread on this.

You can't do an exchange from a taxable fund directly to your Roth IRA contribution.

1. Sell in taxable, funds go to Settlement account of taxable.
2. Wait for funds to "settle"/be available
3. Buy in Roth, source is the taxable Settlement account.

This is how I do it.

You may be OK if you are still in #2. The waiting for settlement period.

I was not able to let my Roth IRA settlement account go negative. This is how I usually do my Roth contributions at Vanguard.

Is your account set up for margin trading? I would assume you will be able to "settle" the taxable settlement positive with the Roth settlement negative. Best to call Vanguard and ask on this one.
You can't do an exchange from a taxable fund directly to your Roth IRA contribution.
I forgot to mention it is a MM fund that is in taxable, and I have done it before. I have done it yesterday and it went without an issue. It is only this one time thing last week.
I would assume you will be able to "settle" the taxable settlement positive with the Roth settlement negative. Best to call Vanguard and ask on this one.
I will try asking Vanguard that, but I wanted them to suggest. I wanted it to show up clearly as a contribution and no other crazy thing.
Thank you
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

Topic Author
BogleMelon
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Joined: Mon Feb 01, 2016 11:49 am

Re: Vanguard glitch / a simple Roth IRA contribution went wrong! What are my options now?

Post by BogleMelon » Mon Feb 11, 2019 3:50 pm

celia wrote:
Mon Feb 11, 2019 3:46 pm
BogleMelon wrote:
Mon Feb 11, 2019 3:29 pm
2- I received a confirmation that I sold the Prime MM fund in the taxable (so far so good)
4- I have an outstanding available POSITIVE balance in my taxable, same amount!
Is the money coming out of a taxable BROKERAGE account where the Federal Money Market Account is the default settlement account? If so, I think you need to go through the settlement fund into the settlement fund of the Roth (if it is also a brokerage account). Then there may be a 3-day delay (business days) while waiting for the settlement account in either/both accounts.

Does this sound anything like your situation?
It is a prime MM fund that I sell in taxable to contribute to the Roth. Did I screw up? If so, why this time only? Other contribution done yesterday (Sunday!) was cleared instantly! And was deducted from my contribution limit at the same moment.
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Epsilon Delta
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Re: Vanguard glitch / a simple Roth IRA contribution went wrong! What are my options now?

Post by Epsilon Delta » Mon Feb 11, 2019 3:55 pm

If this is a settlement issue the best advice is to chill for a few days until everything settles.
Depending on when this happened last week you want to wait until say Thursday before bothering to do anything more.

You've already contacted Vanguard and they have a record of that, a few days delay is not going to cause more problems.

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