Walk me through doing a Roth conversion

[disneysteve]

I have a small traditional IRA at Schwab, a remnant of the days before Roths existed. I want to convert it to a Roth at Vanguard (add to my existing Roth). Do I need to first transfer it to a traditional IRA account at VG and then do the conversion or can I do it all in one step going straight from the Schwab trad IRA to the VG Roth IRA? I will be paying the taxes from outside funds, not from the IRA holdings.

 

[PaunchyPirate]

You can’t likely do it in one step. Since you wish to continue at Vanguard, I would do the traditional IRA transfer from Schwab to Vanguard first. Verify it all came over fine. And then after a period of time (days or more), do the conversion into your current Roth.

 

[TheWizard]

You can’t likely do it in one step. Since you wish to continue at Vanguard, I would do the traditional IRA transfer from Schwab to Vanguard first. Verify it all came over fine. And then after a period of time (days or more), do the conversion into your current Roth.

Agree.
Extremely easy to do when both accounts at Vanguard...

 

[MarieIG]

It is typically easier to pull rather than push. You can open an IRA at Vanguard, have them transfer/ pull your IRA over from Schwab and then convert.

 

[pb4uski]

Check with Vanguard but I think that you could have Schwab send you a check for the balance of the IRA made payable to "Vanguard Brokerage Services FBO Disneysteve". Schwab will send it to you at your address of record which is presumably your home address.

Then take a picture of of the check for your records and mail it to Vanguard for deposit to your Roth IRA and have them code it as a Roth conversion.

I know that you can do this when rolling over from a Schwab tIRA to a Vanguard tIRA. I'm just not sure if you can do it from a Schwab tIRA to a Vanguard Roth IRA but I suspect one call to Vanguard would tell you if that would work or not.

 

[SecondCor521]

I would do as described in post #4 - have Vanguard pull it to a VG trad IRA, then convert. I think it's faster and easier and less error prone than other methods. I also like to avoid indirect rollovers when possible because those can be limited to once per rolling 12 month period in certain scenarios.

Note that once you get it to a VG trad IRA, converting to a VG Roth IRA can be done on the VG website by just clicking on the "Roth convert" button. Once submitted, a Roth conversion takes place over night IIRC. Super easy to do.

 

[Alan]

Check with Vanguard but I think that you could have Schwab send you a check for the balance of the IRA made payable to "Vanguard Brokerage Services FBO Disneysteve". Schwab will send it to you at your address of record which is presumably your home address.

Then take a picture of of the check for your records and mail it to Vanguard for deposit to your Roth IRA and have them code it as a Roth conversion.

I know that you can do this when rolling over from a Schwab tIRA to a Vanguard tIRA. I'm just not sure if you can do it from a Schwab tIRA to a Vanguard Roth IRA but I suspect one call to Vanguard would tell you if that would work or not.

This is exactly how it worked when I moved my Schwab managed 401k to a Vanguard IRA. While talking with the Schwab rep he apologized for not being able to do it electronically but that was because of the specific 401k rules.

We rolled over my wife’s 401k to a Vanguard IRA that same year, the custodian was Fidelity, and it was done electronically. Very easy process.

 

[MarieIG]

As an aside, it seems to me that Vanguard's wait time for CS has very significantly decreased lately. DS#6 couldn't get into his account to made a Roth contribution and he finally called Vanguard on April 14th. Thankfully they got on the phone very quickly and walked him through it.