Roth IRA ToA from Vanguard to Fidelity
Main Problem:
- The user is experiencing difficulties with the Transfer of Assets (TOA) process from Vanguard to Fidelity, specifically encountering a loading issue when trying to submit the transfer online.
Solutions Discussed:
- Fidelity suggested troubleshooting the issue by clearing cache and cookies or trying a different browser or device.
- If the issue persists, the user was advised to contact Fidelity’s customer service for assistance with the transfer.
- For potential issues with the margin account at Vanguard, it was recommended to contact Vanguard to see if there are any complications on their end.
- The user can create a Fidelity brokerage account prior to initiating the TOA process, allowing for the transfer from Vanguard to that new account.
Here’s the full thread
Hi, I currently have Traditional IRA & Roth IRA accounts on Vanguard. I would like to move these over to fidelity. I understand I need to do a ToA. Some questions I have:
1) Do I need to create a brand new traditional + roth IRA account on Fideltiy BEFORE proceeding with ToA? Or will the system automatically do that for me?
2) The Traditional IRA account is solely used for the backdoor conversion. It currently has $0.31 balance in Vanguard. Do I need to move this over or can I just create a new traditional IRA account to do the 2023 backdoor roth conversion?
Thanks!
Hi, @kit . Thank you for stopping by our Discord. We appreciate you considering Fidelity for your retirement needs. I’m happy to provide some insight into the Transfer of Assets (TOA) process.
As you mentioned, a TOA is when you transfer all or part of your assets from one broker or custodian to another. It is usually initiated at the firm you’re moving to – in this case, Fidelity.
To answer your question, yes, you will need to open new accounts with Fidelity, specifically with the same registration as the account you’re transferring. That said, we work hard to make sure the transition is smooth so opening the accounts is integrated into the process. You can start the transfer process by visiting the link below when you are ready to proceed:
Transfer an account to Fidelity: https://www.fidelity.com/customer-service/transfer-assets
For some additional insight, Fidelity does not charge any TOA fees, though other firms typically do. We recommend contacting the sending firm to confirm any TOA fees before submitting your request. Once you have initiated a transfer, you can use our Status Tracker tool to stay up to date on your request.
Transfer Tracker (Login Required): https://digital.fidelity.com/prgw/digital/login/full-page?AuthRedUrl=https://toa.fidelity.com/ftgw/toa/transfer/toaTracker
As for your second question, let’s start with defining what the backdoor Roth strategy is. The process behind a backdoor Roth is to contribute non-deductible contributions to a traditional IRA and then convert the contributions to a Roth IRA. It seems simple, but the process can get complicated when figuring out the taxes you may owe on the conversion if you hold pretax assets. Taxes on a backdoor Roth IRA conversion can be significant and complex.
It’s important to be aware that if you hold both pre-tax and after-tax (non-deductible) money across your Traditional IRAs, the conversion to a Roth IRA will be a taxable event. Essentially, you can leave your balance in your Traditional IRA with your current firm or you can transfer it over, but please note that the IRS does consider your holdings across all IRAs and not just the account used for the conversion. This is because the conversion will consist of a pro-rata recovery of both taxable and nontaxable accounts. It’s worth mentioning that when you contribute to a Traditional IRA at Fidelity, deposits begin earning interest on the date they post to your account. When the interest is received, that portion of your Traditional IRA is considered pre-tax money.
Also, please note that there are no provisions under the law that will allow an individual to isolate only the non-deductible dollars for conversion to a Roth IRA. The portion of the IRA distribution that will be treated as nontaxable is determined by using the following formula:
(Total Non-deductible Contributions / Total non-Roth IRA Balances)
As a reminder, Roth conversions cannot be reversed, and tax planning is an important part of the conversion process. As always, we recommend you review the potential tax impact of a backdoor Roth IRA with a tax professional.
Do keep in mind that Roth Conversions may be completed as often and as many times as you’d like. They may be completed in the same year as the underlying contribution(s) but do not need to be. If you decide to complete a Roth conversion, we have a handy step-by-step guide online to help you through the process. I’ll share the link below:
Roth Conversions Checklist: https://www.fidelity.com/retirement-ira/roth-conversion-checklists
I’ve included an article from Fidelity Learn, our online resource library that you’ll find helpful.
Backdoor Roth IRA: Is it right for you? https://www.fidelity.com/learning-center/personal-finance/backdoor-roth-ira
Please let us know if you have any additional questions; we are happy to help however we can! 🟢
thank you for the detailed and informational response! I currently have a 401k on fidelity. do i need to create new fidelity roth & traditonal accounts before doing initiating the TOA process? Or will the TOA process autoamtically create those for me
Happy to clarify!
It’s really up to you whether you want to open the accounts prior; however, if you follow the process, the account creation is integrated into the steps.
Let us know if you have additional questions! 🟢
thanks! and to confirm, you’d recommend I migrate both the Traditional and Roth IRA accounts, even if they the Trad has a negligible balance?
I have kicked off TOA for both the ROTH and Traditional IRA accounts from vanguard. thank you for your help! some clarifications:
1) will cost basis information and history of transactions will all copy over as well?
2) will I be able to do a backdoor ROTH conversion for 2023 calendar year once the accounts have moved over successfully? (eta 4.3.24)
Happy to chime in here @kit. While we can’t make recommendations, you’re free to move over your Traditional IRA, even if it has a negligible balance. To answer your other questions, Cost Basis information will transfer over, however, it typically takes a couple of weeks to be sent from the sending firm.
The deadline to convert to a Roth IRA for a specific tax year is December 31st of that year since conversions are taxed in the year they are completed. Keep in mind there is no limit to how much you can convert for a given year, and you can do as much as you want. If you choose to convert this year, it will be reported on your 2024 tax forms.
Let us know if you have any other questions!🟢
Hi thank you for this info. I thought we were able to contribute until April 15th for the 2023 tax year. I’ve been able to do this with Vanguard every year as long as the conversion is completed prior to April 15.
Can you point me to any documentation that confirms fidelity cannot do this? I may have to stop my TOA since the 2023 contribution is crucial. Thank you!
Hi @kit! I’ll hop in here to say that while you can contribute to an IRA up until the tax filing deadline, which is usually April 15, the deadline to convert is December 31 of that tax year. If that falls on a weekend, the processing deadline is 4 p.m. ET on the year’s last business day. You can review this under “Deadline to convert at Fidelity” on the below-linked page:
Convert an account to a Roth IRA: https://www.fidelity.com/retirement-ira/roth-conversion-checklists 🟢
Thank you Shawn. A couple of more questions, apologies!
1. will the cash balances transfer over from vanguard as well or only the existing positions
2. i assume this won’t close our account on Vanguard automatically right? we’d have to do that with vanguard directly?
3. This TOA process wouldn’t be a taxable event right? It wouldn’t be categorized as a contribution?
Hi again, @kit. Good to see you again. I’ll be happy to cover these follow-up questions with you.
For the first question, if you are doing a full TOA, cash will come over in addition to any securities transferring in-kind. One thing you’ll want to keep an eye on is trailing dividends and interest, but there is a sweep that will periodically occur to capture those trailing funds.
As to your second question, you will need to confirm Vanguard’s policy as to what they will do with the account.
Finally, transferring an account will not be a taxable event, so you will not have any tax liability at this time. With investments, the tax liability becomes a factor when you sell your assets.
It was a pleasure speaking to you again. If you have any additional questions, please let us know. We’re glad to be able to help here! 🟢
Once you transfer from Vanguard, chances are good that they’ll close the account automatically after some time. They did for me. If you want to leave them open, then probably best to do a partial TOA and leave a little bit left in the accounts.
Thanks for the heads up, good to know. My dilemma is that I want to do a backdoor roth conversion for 2023 which vanguard allows up to april 15 but fidelity does not
My thought is to finish the TOA into FIdelity and then do my 2023 roth conversion in vanguard, and then run another TOA later this year
I don’t know about Vanguard anymore and would need to check IRS docs about the conversion. I’m pretty sure an 8606 is issued in the year any conversions are done. So you could contribute for 2023 but the 8606 will be issued for 2024 taxes. Probably best to confirm that with a tax professional
There’s some similar questions over on Bogleheads.org if you want to take a quick look there
Hi, thanks for this info! my TOA is complete.
1. All assets and cash were moved over EXCEPT one position in $BA. any idea why this may be? will there be another sweep to move this over?
2. When will cost basis info be reflected in Fidelity?
Hi, @kit.
For your first question, we recommend reaching out to Vanguard. For your second question, transferring firms are allowed 15 days from receipt of shares to deliver the cost basis on your covered shares. If Fidelity does not receive the transfer file within 10 days of receipt of shares, we automatically request the transfer statement from the delivering firm. Once the transfer statement is requested, an additional 15 days is allotted to the other institution for a response. 🟢
thanks!
Hi, I have another roth IRA account with Vanguard. Am I able to do a ToA from that new account into an existing Fidelity Roth IRA account? Or would it need to go into a new Fidelity Roth IRA account?
Hey there, @kit.
You do not need to open a new Roth IRA to transfer to. You can initiate a TOA to the existing Roth using the link below.
Transfer an account to Fidelity: https://www.fidelity.com/customer-service/transfer-assets
Let us know if any other questions come up! 🟢
Got it, thank you!
this is an account that i used on vanguard for my 2023 backdoor roth conversion. given that, it is a new account that has $6500 but i do not have a monthly statement to upload as of now
would it be okay to skip that step in ToA? or is a statement required?
@kit When submitting a Transfer of Assets (TOA) into Fidelity, a statement is not required as long as the TOA form is fully completed correctly. However, sometimes our online system requires a document to be uploaded to fill the statement requirement. If this is the case, and you are not able to submit the TOA without bypassing the statement portion, then we suggest uploading a screenshot of your name and account number from the firm’s website/mobile app. 🟢
hi, ive had a great experience with fidelity and wnat to transfer my brokerage account from vanguard over to fidelity as well. would this be the same process as above?
non-retirement account
and would it transfer all existing assets/positions as well as cost basis information, etc.
how would taxes work for 2024 then, would i receive separate 1099s from fidelity and vanguard?
Thanks for reaching out to us here, @kit.
To put it simply, you would follow the same Transfer of Assets process that was outlined above!
On top of that, while most positions will transfer over there are some that may not. This includes proprietary funds, which can only be held at one particular firm, as well as penny stocks, fractional shares, and more. If you have any questions about the eligibility of your specific positions, feel free to let us know what they are in the comments below. Keep in mind that your cost basis will typically transfer over within 15 business days after the shares have been allocated to your account.
Lastly, you’re correct about taxes. You would receive two separate 1099s, one for Vanguard and one for Fidelity. If you have questions about how to file your taxes, we recommend speaking with a tax advisor.
If you have any additional questions, be sure to let us know! 🟢
Thanks! Would the 1099s be respective to the time frame? I.e. fidelity would be for the day toa is completed until end of year
Great question, @kit!
That’s correct. Any tax forms you receive from Fidelity will include transactions and information after your transfer’s completion through the end of the year. The same goes for any activity at the previous firm, which would appear on their respective tax forms.
We’re here should more questions come up! 🟢
hi, finally getting to this. i was trying to do a ToA of a Vanguard Brokerage Account, at the last step of this process I keep getting this never-ending Loading
ah it wont let me upload a photo
its essentially stuck on that last page when i review my info and hit submit to open a new fidelity account as part of the ToA process
Hi @kit. Thanks for following up with us!
We’re sorry you’re having trouble with the Transfer of Assets (TOA) process. We haven’t received widespread reports of issues when submitting TOAs. To troubleshoot, please try clearing your cache and cookies or trying a different browser or device.
If you’re unable to proceed online, please give our customer service team a call for assistance with the transfer. Associates can be reached 24/7 via the link below.
Fidelity Contact Information: https://www.fidelity.com/customer-service/contact-us
If anything else comes up, please don’t hesitate to let us know. We’re here to support you through the process! 🟢
Thanks. Do you think there might be an error in ToA if my Vanguard Brokerage Account is a Margin account?
@FidelityHeather would it be possible for me to first manually create a fidleity brokerage account and then do a TOA from Vanguard to that new account?
Hi, @kit. In addition to calling our service team to review the TOA, you may also consider calling Vanguard to determine if anything on their end is causing issues with the transfer, especially since you mentioned this is a margin account. 🟢
Got it. But would creating an account and then transferring assets be possible or an account has to be created through TOA process?
Hi there ⠀. If you would like to open an account before a TOA, you can. Then, you can start the TOA process with the new account that has already been established. 🟢