I plan to do a conversion from my TIRA to my Roth IRA. My question is whether the only thing that can be converted in this case is CASH – i.e., dollars. Then, I’d have to sell some of the actual holdings in my TIRA and then convert the proceeds into a Roth. --Or, can I take some of my stock holdings in the TIRA and simply convert those holdings directly to my Roth IRA?
culcha
I plan to do a conversion from my TIRA to my Roth IRA. My question is whether the only thing that can be converted in this case is CASH – i.e., dollars. Then, I’d have to sell some of the actual holdings in my TIRA and then convert the proceeds into a Roth. --Or, can I take some of my stock holdings in the TIRA and simply convert those holdings directly to my Roth IRA?
You can do either. Converting stock is considered an ‘in-kind’ conversion. It’s generally easier to do an in-kind conversion if the Roth and Traditional accounts are held at the same brokerage. You should check with your brokerage to confirm the specifics on how they price in-kind conversions.
AJ
Hi culcha,
Yes, cash and/or securities.
The last two conversions that I did were at Schwab. I logged in to my account, went to the Transfers Menu, selected Cash & Securities and the from/to accounts. Then I choose the cash to transfer and the stock/shares of that I wanted to convert, answered the various questions and “Bang”, it was done.
Prior to that, starting in 2010, I would call USAA Brokerage and I watched live as I gave the person the instructions and saw the movement from our trad IRA’s to Roth.
I always converted all cash. If there was a down-turn, I wanted that cash in the Roth IRA to invest in bargains.
One more suggestion:
Move the stock that you believe has the highest growth potential from today forward. Highest Future Growth. Not what happened yesterday or last year. Future.
Does that help you?
Gene
All holdings and some statistics on my Fool profile page
http://my.fool.com/profile/gdett2/info.aspx