Roth conversions | Robinhood

Roth conversions

You can use a Roth conversion to convert existing retirement assets from a traditional IRA to a Roth IRA.

A Roth conversion can also be part of a backdoor strategy to get the benefits of a Roth IRA even if your income is too high to contribute directly. We recommend consulting a qualified tax professional to determine if a Roth conversion is right for you.

A conversion requires you to have a funded traditional IRA first, and then move the money into a Roth IRA. Check out IRA contributions for details about income limits for IRAs.

You need both a traditional IRA and Roth IRA opened with Robinhood and funds available to withdraw from your traditional IRA before starting a Roth conversion.

Get started

Be sure to review the Important to know section before starting a Roth conversion.

To start a Roth conversion from within your Robinhood account:

  1. Open a traditional IRA with Robinhood

Open traditional IRA

  1. Fund your traditional IRA through a new contribution, rollover, or transfer

Fund IRA image

  1. Open a Roth IRA with Robinhood

Open Roth image

  1. When the money is available (as we currently support cash-only Roth conversions), move (convert) the money from your traditional IRA to your Roth IRA by going to RetirementSettings

Convert IRA image

  1. In IRA settingsActions, select Start a Roth conversion
  2. When prompted, enter the total dollar amount, and then select Review to get to something similar to the following example

Review conversion image

  1. Confirm the details, and then select Convert

After the conversion is complete, you can then choose how to invest your Roth IRA money. Check out Retirement investing to get started.

Important to know

  • You may be required to pay taxes on the converted amount for the tax year in which you complete the conversion. Roth conversions are reported on your taxes for the year the conversion occurs. Keep in mind, any converted IRA Match will also be taxable.
  • Generally, the converted amount or any earnings may be taxed as ordinary income, which is reported on a Form 1099-R from Robinhood. You’ll also get a Form 5498 detailing the amount converted to a Roth IRA.
  • We currently support cash-only Roth conversions. Keep in mind, bank deposits can take up to 5 business days to complete. You can only convert withdrawable cash. You may need to liquidate securities into withdrawable cash in your traditional IRA before you can convert it. You may also need extra cash available for tax withholding. To request a tax withholding on your Roth conversion, you’ll need to contact us.
  • It’s important to understand that Roth conversions are irrevocable, which means you can't undo the conversion afterwards. Make sure you're eligible to convert a traditional IRA to a Roth IRA before submitting your request. Robinhood is required by law to report a Roth conversion from your traditional IRA to your Roth IRA to the Internal Revenue Service (IRS) and state tax authorities.
Keep in mind

If you have a required minimum distribution (RMD), you must satisfy your RMD before you can complete a Roth conversion.

Disclosures

A Roth IRA conversion will affect your taxes. Contents provided are for informational purposes only and do not constitute tax or investment advice.

This is not a recommendation of a Roth conversion. For specific questions, we recommend consulting a tax professional. A Robinhood IRA account requires first opening a Robinhood brokerage account.

All investments involve risk and loss of principal is possible. Investors should consider their investment objectives and risks carefully before investing.

Securities trading is offered through Robinhood Financial LLC, a registered broker-dealer and Member SIPC, and a subsidiary of Robinhood Markets, Inc. (Robinhood).

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Brokerage services are offered through Robinhood Financial LLC, (RHF) a registered broker dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (RHS) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (RHC) (NMLS ID: 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. The Robinhood spending account is offered through Robinhood Money, LLC (RHY) (NMLS ID: 1990968), a licensed money transmitter. A list of our licenses has more information. The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard®. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. RHC is not a member of FINRA and accounts are not FDIC insured or protected by SIPC. RHY is not a member of FINRA, and products are not subject to SIPC protection, but funds held in the Robinhood spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Check out Robinhood Financial’s Fee Schedule for details.

© 2024 Robinhood. All rights reserved.