I understand what IRA conversions are and how they work in theory, but I would like someone who has actually done one (or a few) to explain how it works in practice.

What is the process for the conversion? How do you initiate it?

Do you have to create a new IRA for the amount you want to convert, or can you do partial conversions from one account?

Are you usually charged a fee by your financial institution? Are there ways to avoid this?

I have IRAs at both Vanguard (Roth) and Charles Schwab (Traditional) if anyone has particular information about those institutions it would be great.


It's a form. I have a retired woman (my mother in law in the interest of disclosure) who would otherwise be in the 15% bracket. In November, I filled out, and she signed the form to move from IRA acct to Roth Acct $10,000. Done. In March, I'll look at TurboTax and see the line "taxable income" which will tell me how much we went into the 25% bracket. We will recharacterize that exact amount. In 2011, the 15% bracket for single ended at $34,500 that will be the exact amount of her taxable income when I am done with her return.

Her RMDs are increasing in percent each year, but we shift to Roth and are staying ahead of the curve so she never pays 25%.

Minor note - the RMD numbers are produced as of Dec 31. So the money we recharacterize has to be added back in. The broker may not do this automatically, you should double check.

No fees. We use Schwab.

  • Great, thanks! Easier than I expected. And the recharacterization is just as easy? – Sean W. Jan 28 '12 at 0:14
  • Yes, but I added minor note regarding RMD issue. – JTP - Apologise to Monica Jan 28 '12 at 0:38

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