Is it too late for me to swap my $6,000 in IRA contributions?

[TexTexTex]

Hello all,

I recently contributed $6K into my Roth IRA through Fidelity. Is it too late for me to swap those contributions to my Traditional IRA? If not, how would one do so on their platform? Simply transfer the balance? The Roth has slightly less than $6K in it due to market fluctuations.

[SweatingInAR]

You should give Fidelity a call! They have always been great in my experience. They will probably ask you to fill out and mail in this form:

https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/ira-recharacterization-request.pdf

[terran]

Just call them up and tell them you want to recharacterize. Make sure you use that word. It's less important in the Roth -> traditional direction, but at least in the opposite direction it would be easy for them to misinterpret and make a conversion if you used words like transfer. I'm 90% sure I've never filled out the form SweatingInAZ linked to, so I'm pretty sure it can all be done over the phone.

Alternatively, it looks like if you log in and then search "recharacterize" in the search box in the upper right the first search result is an online form you can fill out. I can't remember if I've ever done this, so I'm not sure what happens once you complete it (if it just works, you still have to call in, or if it gives you a form to mail in). Report back if you use it.

You can recharacterize any time until your tax filing deadline. If you might not want to recharacterize the whole thing I'd wait until you get final income numbers (wages, interest, dividends).

Make sure you attach a statement to your taxes explaining what you've done as directed in the instructions for form 8606.

[Dicey]

Yes, you can typically recharacterize funds. It's fairly common for people to do their Roth in January, then later discover they're going to earn too much, especially if they have lumpy income. Financial institutions are used to this.

The more important question is, why do you want to do this? Is this a panic move due to market fluctuations?
.

[TexTexTex]

Just finished the book "The Simple Path to Wealth - JL Collins" and it appears the wiser use of those dollars would be contributed towards my IRA rather than the Roth IRA.

It's hard for me to be 100% but it sounds like the cap on contributions for both IRA and ROTH IRA are $6K total. So I understand that clearly I can't contribute $6K to my Traditional IRA AND contribute $6K to my Roth IRA correct?

[secondcor521]

It's hard for me to be 100% but it sounds like the cap on contributions for both IRA and ROTH IRA are $6K total. So I understand that clearly I can't contribute $6K to my Traditional IRA AND contribute $6K to my Roth IRA correct?

Correct.  It's a combined limit between both types of account, so you can do any mixture of contributions as long as traditional contributions plus Roth contributions are less than $6K or your (and your spouse's) earned income, whichever is less.

[Dicey]

Just finished the book "The Simple Path to Wealth - JL Collins" and it appears the wiser use of those dollars would be contributed towards my IRA rather than the Roth IRA.

It's hard for me to be 100% but it sounds like the cap on contributions for both IRA and ROTH IRA are $6K total. So I understand that clearly I can't contribute $6K to my Traditional IRA AND contribute $6K to my Roth IRA correct?

Secondcor's answer is correct.

Beyond that, you might be fine to just let the 2021 Roth ride and make your 2022 IRA contribution as soon as possible. The best move is to fund whichever one you chose as close to the beginning of the year as your situation allows. Consistently frontloading your contribution every can make a huge difference over time, whichever you choose.
P
P.S. We love JL Collins around here. Do you follow his blog, too? As he would say, it's free.

[TexTexTex]

It's hard for me to be 100% but it sounds like the cap on contributions for both IRA and ROTH IRA are $6K total. So I understand that clearly I can't contribute $6K to my Traditional IRA AND contribute $6K to my Roth IRA correct?

Correct.  It's a combined limit between both types of account, so you can do any mixture of contributions as long as traditional contributions plus Roth contributions are less than $6K or your (and your spouse's) earned income, whichever is less.

Thank you for the clarification. Finally feel solid in the understanding of the rules now.

[TexTexTex]

Just finished the book "The Simple Path to Wealth - JL Collins" and it appears the wiser use of those dollars would be contributed towards my IRA rather than the Roth IRA.

It's hard for me to be 100% but it sounds like the cap on contributions for both IRA and ROTH IRA are $6K total. So I understand that clearly I can't contribute $6K to my Traditional IRA AND contribute $6K to my Roth IRA correct?

Secondcor's answer is correct.

Beyond that, you might be fine to just let the 2021 Roth ride and make your 2022 IRA contribution as soon as possible. The best move is to fund whichever one you chose as close to the beginning of the year as your situation allows. Consistently frontloading your contribution every can make a huge difference over time, whichever you choos

P.S. We love JL Collins around here. Do you follow his blog, too? As he would say, it's free.

Good point on front loading early in the year. Get that money working quicker!

I do not follow his blog, but I probably should. His book was fantastic!

[Jack0Life]

Hello all,

I recently contributed $6K into my Roth IRA through Fidelity. Is it too late for me to swap those contributions to my Traditional IRA? If not, how would one do so on their platform? Simply transfer the balance? The Roth has slightly less than $6K in it due to market fluctuations.

Yes you can. I have done it before.

[engineerjourney]

Make sure your household income is low enough to get the full deduction for the traditional IRA, unless you don't have a retirement account through work, because Roth could be better depending on your circumstances. 

https://www.nerdwallet.com/article/investing/ira-contribution-limits

[darkskys]

Yes you can do this as long as you are within the income limits for putting money into a traditional IRA. The amount you can transfer is based on your income.
I’ve done this many years before I made enough where I couldn’t.