By Dr. Jim Dahle, WCI Founder
It is not much different to do a Backdoor Roth IRA at Fidelity than it is at Vanguard, Charles Schwab, or anywhere else. The first step, of course, is making sure you have both a traditional IRA and a Roth IRA at Fidelity. It should only take a few minutes to open those up. Start with the traditional IRA.
Step 1: Contribute to Fidelity Traditional IRA
First, log into Fidelity. Then, click on “Open an Account” at the top.
Select “Open an account” in the Retirement & IRAs section, and on the next page, select “Open an IRA” in the Traditional IRA section.
After inputting your personal information, look over the “important documents” and open the account. Easy peasy.
You should now see it on the left side of the screen with your other Fidelity accounts.
Next, you'll need to fund that traditional IRA. It's easiest to just transfer it from your checking account. Hit “continue” at the bottom of the page.
Now you have $7,000 [2025 individual contribution limit] in your traditional IRA. You'll probably need to leave it in the traditional IRA for at least a few business days (or what Fidelity calls “an extended hold period”) until you can see the $7,000 actually in the account. This is an old screenshot with a different amount of money in it, but you get the point.
Now, you just need to convert it to a Roth IRA.
Step 2: Convert Fidelity Traditional IRA to Roth IRA
If you don't yet have a Roth IRA at Fidelity, you can open one up from the exact same place you opened up the traditional IRA. This time, click “Open a Roth IRA.”
Log back in when the money appears in the Traditional IRA and hit “Transfer” at the top.
Just transfer $7,000 from your traditional IRA to your Roth IRA. If there are a few extra cents that you made from interest in the account, don't worry about it.
Do not have taxes withheld because there will not be any due.
Convert the entire balance. Be sure to leave the account open for next year.
Step 3: Choose Your Fidelity Roth IRA Investments
You can now invest it into your preferred investment within the Roth IRA in the usual manner.
If you have a question about the Backdoor Roth IRA and not Fidelity specifically, you should FIRST read this very in-depth Backdoor Roth IRA Tutorial before asking your question in the comments below. I promise you there is a 99% chance your question has been answered there.
What do you think? Do you do your Backdoor Roth IRA at Fidelity? Why or why not?
I am jumping in late on the backdoor IRA but didn’t realize how difficult the process is at Fidelity.
Apparently Fidelity has introduced a 16 business day holding period on EFTs due to an uptick in fraud.
My contribution of $7000 for 2024 in my traditional IRA on Dec 2nd supposedly is not eligible for conversion until Dec 24th.
I’m scared that it might be longer than that, as I also want to get a head start on 2025’s contribution come Jan 2nd.
Would there be any issues if I am unable to pull off the backdoor conversion in a timely manner?
Right now I’m afraid the contribution will automatically earn interest because it’s being held in their SPAXX money market fund.
16 days isn’t the end of the world. I’ve often had to wait a week at Vanguard. It helps if the money you use is already there at the beginning of the year. In that case the wait is usually much shorter. So if you care a lot, move the money to Fidelity in late December for your 25 Backdoor Roth.
And quit putting this thing off until December if you can. That’s never a good idea for anything but RMDs.
Do get that conversion done before the end of the year though so you can avoid getting pro-rated on your taxes. You should have plenty of time between the 24th and 31st though. Just don’t forget about it. And it’s okay if it earns interest. Just convert that too and pay a little tax on it. More on that here:
https://www.whitecoatinvestor.com/pennies-and-the-backdoor-roth-ira/
Fidelity finally let me convert to the Roth on Dec 24th, but I did end up gaining an $10.82 interest. It says the interest is posted Dec. 31st, but it didn’t appear on the website until the New Year kicked over. According to the Pennies link, I just add in another $7000 for 2025 on Jan. 2nd, and then Roth conversion $7010.82 on Jan. 3rd or ASAP, right?
I definitely won’t be putting this off for 2025 — just a bit unfortunate for me that I stumbled on your website so late in life, but better late than never!
Second person to ask this question this afternoon who pretty much did the same thing. Here’s the post for you:
https://www.whitecoatinvestor.com/pennies-and-the-backdoor-roth-ira/
You’ve got it! $11 isn’t a big deal to get pro-rated on, just makes your paperwork slightly more complicated.
It is now taking almost a month in fidelity for funds to become available to convert. Definitely need to see the pennies page for what to do when you earn about 12 dollars in interest.
https://www.whitecoatinvestor.com/pennies-and-the-backdoor-roth-ira/
I want to do a backdoor Roth conversion for the first time. Yesterday I opened a Traditional IRA and it funded overnight. However, Fidelity is saying it won’t be available to withdraw until January 10! This is annoying, but the deadline for 2024 is April, right? Would I be able to do this again in 2025 and do the second conversion in 2025 (to count for 2025)? Also, what do I do with any dividends acquired in the Traditional IRA before I can convert it? Can I just convert whatever the balance is on that date?
January 10th is a long time, but you’re not the first I’ve heard complaining about this with Fidelity. Vanguard often made me wait a week. Good reason not to wait until December to do this. Did you do a conversion in 2024? If so, it’s going to be pro-rated.
No, no conversion at all yet. I escalated and they are saying they might be able to get it done this week, but we will see. Is there any bad consequence for me if it doesn’t happen until 2025?
If there was no conversion done in 2024, then no, there won’t be any “bad’ consequences like getting your conversion pro-rated. Do your 2025 Backdoor Roth a lot earlier in the year if you can. In fact, you could do your 2025 contribution the first week of January and then just convert both year’s contributions at once.
It helps avoid the long wait if you already have the money at Fidelity rather than having it come from your bank account too.
If you open an IRA in January and perform the conversion the same month the conversion for tax purposes would be for the current year correct? Even though it is before the 4/15 cutoff for contributions?
The contribution would be for 2024 and go on your 2024 8606 and your conversion would be in 2025 and go on your 2025 8606.
Would it be simpler for tax purposes then to do both after the 4/15 cut off so both would register for the same year? Not sure if that makes a difference tax wise.
No, it doesn’t make any difference. Easiest way I’ve found to do this is to do your 2025 traditional IRA contribution on 1/2/25 and do a Roth conversion of that money on 1/3/25.There are lots of other ways it can be done and not all of them are wrong, but I’m still convinced this is the best way to do it.
I have a rollover IRA with fidelity since I was trying to consolidate retirements from residency and fellowship in the past. Do you know if I can just deposit the money into the rollover account instead of a traditional IRA and then move into Roth? Thanks
You’ve got a bigger problem than what account to use. Your conversion will be pro-rated if you don’t roll that IRA into a 401(k) or pay taxes to convert the whole thing.
The rollover IRA was at $0. The other retirement accounts were previously moved into a 401a and 457.
Nice work. Yes, you can use that IRA. A rollover IRA is just a traditional IRA.
Thank you for taking the time and thoughtfulness in creating this detailed document! I am trying to perform a backdoor Roth in Fidelity today and found the steps in this article are not matching up. Maybe the layout has changed? Would you look into this when you have a moment?
With much appreciation,
Julie
Yes, the layout changed this year, like Vanguard’s. I don’t do a Backdoor Roth IRA at Fidelity every year, I do two at Vanguard. So I captured redcacted screenshots as I did and will update the Vanguard post. If you or someone will do the same at Fidelity and send me the images, I will do the same for this post.
The process is the same though.
Hello! We have a rollover IRA with Fidelity and have never done a backdoor Roth. Do I still follow your steps exactly or am I able to do the backdoor within the rollover account? I assume I do the former since within the rollover it asks if I want to contribute 7k to a Roth and we obviously exceed the income limit.
Just want to make sure. Thanks for talk you do, really.
# 1 You need to do SOMETHING with the tax-deferred money in the rollover IRA before you do anything or your conversion step will get pro-rated. Clean that up first either by converting it all to Roth and paying the tax bill, or rolling it into a 401(k) or 403(b).
# 2 Then and only then, make a $7K contribution to that “rollover IRA” or a new IRA.
# 3 Then convert that $7K to a Roth IRA.
More info here:
https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/
Hi! We reached the income limit for the roth IRA a couple of years ago so we have been contributing regularly to a traditional IRA which gets invested into various places but not maxing out the contribution. We’ve delayed doing the backdoor because i didnt know how but am finally taking care of it. Can you transfer more than the $7000 contribution limit from the traditional to the roth if the contributions were from different years? And im guessing we will just need to pay the taxes on it and learn our lesson?
Yes, there is no limit on the size or deadline for Roth conversions. You can convert 5 years worth of contributions this afternoon no problem. You’ll probably owe tax on the earnings though. That’s why you should convert ASAP after the contribution.
Hello! This is my first time doing a backdoor IRA. If I make a non-deductible contribution in February 2025 for the 2024 and 2025 tax years ($7,000 each year) into a traditional IRA and then convert it to a Roth IRA, how should this be reflected on Form 8606? I haven’t filed my 2024 tax return yet. Also, if my husband wants to do a backdoor Roth, does he need to open his own Roth accounts, or can he use the same Roth accounts as mine?
2024 contribution on 2024 8606.
2025 contribution and conversion on 2025 8606.
He needs his own INDIVIDUAL Retirement Arrangement accounts.
I’ve done this process for years and this year had an issue– I funded my traditional with the max of $7000 and somehow in the few days that it sat in the traditional IRA money market it accrued enough interest to become $7002.87. I transferred only $7000 to my Roth but left $2.87 in my traditional IRA. Anything I need to do here to avoid any problems? Thanks!
Convert the $2.87.
https://www.whitecoatinvestor.com/pennies-and-the-backdoor-roth-ira/
How can I also convert $2.87 if $7000 is the max contribution for 2025?
There is a limit on contributions but not conversions just like there is a deadline on contributions but not conversions.
I have a Roth IRA with Fidelity I was funding for a few years as a resident. I’m now in year 1 as an attending. At the start of 2024, I contributed $7k to that Roth IRA and invested those dollars. With 6 months of residency income and 4ish months of attending income in 2024, my wife (also a physician) and I made slightly more than the limit to be able to contribute directly to a Roth IRA as married filing jointly, so I unfortunately had to withdraw those funds + earnings prior to April 15. A few questions:
1.) Can I open a traditional IRA, fund it prior to April 15, and then do the conversion when able with Fidelity, and that counts towards 2024 and I would report on 2025 taxes? Or have I already missed the boat on 2024 at this point? I’ve already filed taxes for 2024.
2.) Can I then put funds in the same traditional IRA and backdoor convert funds for the 2025 contribution?
Why did you withdraw instead of recharacterize the contribution and then reconvert it?
https://www.whitecoatinvestor.com/ira-recharacterizations/
What more can I do to prevent people from doing things like this? Did someone tell you to withdraw the money? Did you read to do it somewhere?
1. # 1, if you made a contribution for 2024, you report it on your 2024 taxes. # 2, you already made your 2024 IRA contribution and then withdrew it. You can’t make it again. You should have recharacterized it. Oh well. Might as well do your 2025 Backdoor Roth IRA since you have the money ready to invest. At least you won’t have to refile your taxes that way.
2. Yes, you can use the same traditional and Roth IRA every year.
Unfortunately, I asked an accountant and the advice I was given was to withdraw prior to April 15. Was investigating this close to tax filing time, and so I made that move hastily. Subsequently did some additional reading here as time allowed and did come across posts recommending recharacterizing it, but the damage was done. Thanks for your time.
Hi,
Can i do backdoor Roth IRA from Rollover IRA account in fidelity?
Yes, but keep in mind a rollover IRA often has a lot of tax-deferred money in it and may cause your Backdoor Roth process step 2 (Roth conversion) to be pro-rated. You don’t want that.
I have a large sum I would like to convert to a Roth IRA from a money purchase pension plan. I intend to roll it over to an eligible Traditional IRA, open a Roth IRA and fund after tax funds to this Roth IRA Account, then convert funds from Traditional IRA to back door to the Roth IRA. What is the tax liability on this scenario if the funds are co-mingled? Is there seperate reporting for both contributions? In addition, I retired a year ago and still on the fence about moving the this sum because the annual interest earnings are historically in the double digits. At some point in the future down the road I intend to take a distribution. Does this affect the ability to contribute to a new Roth IRA and back door the Traditional IRA funds?
Lots of questions and I’m not quite sure what is going on. Any tax-deferred money moved into a Roth account is a taxable Roth conversion.
You don’t mention what investment you have that pays double digit interest, but it’s probably available in the new Roth IRA too.
If you’re retired, you can’t make new IRA contributions.
The Backdoor Roth IRA process has two steps, the first of which is a contribution to a Roth IRA. Not every Roth conversion is a “backdoor” thing.