Hello everyone!
I just opened my Traditional IRA with VANGUARD for myself and my Fiance and filled them with 11k each (2014/2015)
Do I just open a new roth IRA now and somehow move the funds to that? How does this work?
Thanks!
I would open the Roth, but instead of doing the transfer yourself I would just call Vanguard and have them do it or at least walk you through it. You want to make sure the conversion gets done right, and I know from calling them myself that they have a dedicated team just for Roth conversions.
Also as noted above make sure you don't have any money sitting in pre tax IRAs like traditionals, Rollovers, SEPs, etc. If you do then the IRS looks at the conversion on a pro rata basis. If you have 5500 in a trad by itself all post tax money and you convert it to a Roth 0 is taxable. However exact same situation with a separate 100k rollover IRA floating around and the conversion gets treated as 94.79%(100/105.5) pretax money, and $5213.27(.9479*5500) is taxed.