Vanguard is really a piece of shit
I’ve been using fidelity and I’m happy with it. I moved to google recently so I have to use vanguard for 401k. My partner and I heard about the back door for after tax contributions and Roth 401k this year (yea we are late to the game), so we decided to try that. However, vanguard just makes it super painful to do that (or anything at all). Before I jump into the complaint part, I’d appreciate if anyone can help me understand: 1. How to transfer the money in Vanguard’s 401k Roth account to the personal Roth account in Fidelity? 2. My partner and I are still very new to “back door”, so I’d appreciate if anyone can let me know if my understanding for this “back door” is correct or not: you can contribute to after-tax account, move money from after-tax to 401k Roth, move it to personal Roth, and then buy stock with it. I can take the contribution from personal Roth after 5 years with no tax penalty, but I have to wait until 65(?) to withdraw the gain with no tax penalty. Here’s what we’ve been through: My partner tried to open a personal Roth account, but the site doesn’t allow him to do it since he’s not an American citizen. He called vanguard during business hours, waited for ~2hours and then they asked him to leave a voice mail. He left a voicemail but never received any calls from them. He called vanguard again, waited for ~1 hour, someone picked it up, asked him to wait in a “priority phone line” for another hour, and then finally someone else helped him to open an account (when I say “help”, the agent literally just clicked a button, which enables my partner to create an application). The customer service is horrible and this “wait for a few hours to open an account” idea is just straight up stupid. For me, I pretty much gave up opening a personal Roth account on Vanguard after I heard what my partner went through. I opened a Roth account on fidelity (took me 15 mins), and then I tried to roll over my Roth 401k from my vanguard to my personal Roth account in fidelity. However, it’s painful as well since Vanguard’s website is extremely confusing. I don’t see a “rollover to another institution” option. I only saw “withdrawal” option, but I don’t think that’s what I’m looking for. I also don’t want to wait for a couple of hours on the phone to ask Vanguard for clarification. I’d appreciate if someone who has been through this process gives me some advice. #Vanguard #roth #google
If you leave it alone for 5 years and you're at least 59.5 (not 65) all the earnings are tax free. I think there's plenty of YouTube videos that can explain mega backdoor Roth. The whole process is kinda lengthy to type out.
Thanks man, I got so frustrated that I wrote the wrong age limit. Yea we spent a lot of time researching back door, once it’s cleared up, it’s not hard to understand. My main complaint is that vanguard makes rolling over to Roth IRA very painful and there’s no way to do it without spending hours waiting on the phone
I strongly suggest you and your partner spend a lot of time exploring the back door. Dig into every nook and cranny of it. Really just pile in, full steam. You may be surprised by just how much you can shove through it. The contributions you’ll be able to make via the back door will be very rewarding. I suspect you’ll ask yourselves why you weren’t backdooring earlier. It’s changed my life.
I’m really having a hard time determining if this is advice or one big innuendo.
This is true good advice, a rarity
As for your transfer question, since you want this yo be transferred to Fidelity, call Fidelity and they are going to take care of it or at least help you. Think of this: the entity receiving the money is always interested in getting more money, and so, if they are not suboptimal, they will help. I regularly pull money from my company HSA to my Fidelity HSA. Fidelity takes care of pulling the money from the other account. I don’t have to deal with HSA banks from hell.
Thanks, fidelity site specifically says “Rolling over to Roth IRA has to be done by the sender”, and it’s confirmed by a 2021 investment doc in google, so calling vanguard is the only option here
Thanks for the correction and I hope that goes fast.
You are mixing up back door Roth with mega back door Roth. Back door Roth is a button push in vanguard and I’ve been doing it for 10years.
This.
Go into moma and write “hack your retirement” it will explain it all and you can understand how. It’s actually easy and you can set it up in less than 5 min once you’re in there but it’s a lot to type out on blind, good luck!
Moma?
Museum of modern art