Upbeat music plays throughout.
The clip begins with a static top-down shot of a desktop. A notebook appears with "To do list" written at the top. The tip of a potted plant sits above the notebook next to a cup of coffee, a pair of glasses, and a pen.
"Convert my IRA to a Roth IRA" animates on to the notebook in a hand-written font.
Want to convert your Traditional IRA to a Roth IRA? First, we recommend consulting with a tax advisor to ensure you understand potential tax and distribution implications.
The screen fades to the Schwab.com platform.
Then you'll need to open a Roth IRA account, if you haven't already done so. Click "Accounts" and choose "Retirement." Scroll down to the details for opening a Roth IRA, click, and follow the instructions.
The cursor selects the "Accounts" tab at the top left of the page. A dropdown menu appears, and the cursor selects "Retirement." On the retirement page, the cursor scrolls down the page and selects the "Start" button under the "Apply Now" section of the Roth IRA description. A new page with the title "Let's open your Roth IRA" appears, and then the cursor clicks "Start" at the bottom of the page.
Once your Roth IRA account is established, click "Move Money" and choose "Online Transfers."
Back on the Schwab.com home page, the cursor clicks the tab labeled "Move Money," and then chooses "Online Transfers" from the dropdown menu.
Choose what you'd like to transfer: cash only, positions only, or positions and cash.
A new screen labeled "Set up your transfer" appears. The cursor hovers over the section labeled "Tell us what you'd like to transfer" and clicks the "Cash only" option.
Click the "From" dropdown and select your Traditional IRA account. Then click the "To" dropdown and select your Roth IRA account.
The cursor selects the "Traditional IRA" account in the "From" dropdown menu, then selects the "Roth IRA" account in the "To" dropdown.
Enter the amount you'd like to convert and choose your Tax Withholding Elections.
The screen scrolls down to a field labeled "Cash amount" box and types in "$1,000." The cursor then selects the "Continue" button. The next page scrolls down to the bottom and the cursor enters "0%" in the tax withholding box.
Click "Continue" to review a summary of your transfer. If the details look accurate, click "Submit." Depending on your jurisdiction, additional steps and forms may be required.
The summary page is shown, then scrolls to the bottom where the cursor selects the "I agree" checkbox.
Upbeat music plays in the background. We cut back to the top-down shot of the desktop, zoomed in a bit closer to "To do list" in the notebook. We see a checkmark animate in the box next to "Convert my IRA to a Roth IRA," indicating that the task has been completed.
The screen transitions to a dark blue background with the text "VisitSchwab.com/HowToCenter for more videos."
The screen fades to the Charles Schwab logo with the following disclosures beneath:
Investment Products: Not FDIC-Insured • No Bank Guarantee • May Lose Value
Investing involves risks, including loss of principal.
Withdrawals are subject to ordinary income tax and prior to age 59 1/2 may be subject to a 10% federal tax penalty.
Roth IRA conversions require a 5-year holding period before earnings can be withdrawn tax free and subsequent conversions will require their own 5-year holding period. In addition, earnings distributions prior to age 59 1/2 are subject to an early withdrawal penalty.
The information provided here is for general informational purposes only and is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager.
The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (Member SIPC), offers investment services and products, including Schwab brokerage accounts. Its banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides deposit and lending services and products.
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Learn how to convert a Traditional IRA to a Roth IRA