Vanguard Backdoor Roth Step-by-Step Guide [Screenshots]

Every year or two, Vanguard changes its process slightly. If you understand the Backdoor Roth IRA, these little tweaks are no big deal. If it’s your first time, they can be confusing. We periodically update this post, but if you’re doing this process sometime after this post gets published again, don’t be surprised if it looks a little different from what you see here. The most recent update uses screenshots from 2025.

Here’s all you need to know to do a Backdoor Roth IRA with Vanguard.

Step 1: Contribute to Vanguard Traditional IRA

First, go to your traditional IRA account and click on Transact. That will give you a drop-down menu, where one of the choices is “Contribute to IRA.” Click on that.

This will bring you to this page.

It shows you the contributions made so far for the years that are still eligible for contributions. You can see we previously maxed out the 2024 contribution, so all that is left is a 2025 contribution. And notice also that it is just going into cash—the Federal Money Market (Settlement fund)—so it doesn’t have a loss in between the contribution and conversion step. Then, you need to choose where the money is coming from.

You’ll have multiple choices, including using any of the banks you’ve linked to this account, sending Vanguard a check, exchanging from another fund, or using your settlement fund. If you can, use the settlement fund in your brokerage account. It will decrease the amount of time for money to “settle” and allow you to complete the Backdoor Roth IRA process a few days faster. This is a bigger deal at Fidelity than at Vanguard, but, when I used money from my bank account to make the IRA contribution at Vanguard, I had to wait up to a week between contribution and conversion.

You’ll likely end up at this screen next. In this case, we took the money out of the Federal Money Market (Settlement fund) in our brokerage account, so if you’re doing the maximum amount of $7,000 [2025 — visit our annual numbers page to get the most up-to-date figures], type in that number and hit Continue.

That all looks OK, so hit Continue.

Hit Accept here, and it brings you to the review and submit page.

Check it over and hit Submit. That’ll take you to the confirmation page.

Congratulations! You’ve made a contribution to a traditional IRA and left the money sitting in cash. At Vanguard, you’re done for the day. If you used your settlement fund, come back tomorrow (or the next business day). If you used your bank account, come back in a few days after the contribution “settles” to do step 2.

Step 2: Convert Vanguard Traditional IRA to Roth IRA

On Day 2, you go to your traditional IRA and hit the “Convert to Roth IRA” button.

There are other ways you can get to the same place, like going to the “exchange funds” link (on the buy and sell menu). But this way seems easiest. You’ll then come to a screen that looks like this.

This page is just a warning; you don’t need to worry. Hit the “Start my Roth conversion” button, and you’ll go to the next page.

There’s a lot of good stuff on this page, but you can ignore it all if you’re a typical white coat investor doing your annual Backdoor Roth IRA. Hit Continue.

I love this page. It doesn’t ask you if you want to withhold taxes (you don’t); it just has you agree that you won’t. Perfect. (You’re not going to owe taxes on the conversion of a non-deductible contribution anyway, and if Vanguard did that, it would just mean you ended up with less in your Roth IRA and have to wait for your tax refund to get the money back.) Hit “I agree” and then Continue, and go to the next page.

I like this page, too. It’s Vanguard’s new look, and it has a nice bar at the top to track your progress through the Roth conversion. Hit Continue and move on to the next page. Note that the page may give you a warning that looks like this:

That just means the money in your traditional IRA hasn’t settled yet. Come back in a day or three when it has. If it is settled, the next page will look like this.

If you’re doing your Backdoor Roth IRA process right, you just convert the entire account because all that is in there is this year’s IRA contribution. Don’t worry about the tax warning. Remember, some Roth conversions are taxable but not in the Backdoor Roth IRA process. Hit Continue and go to the next page.

This page seems a little odd when you only have one Roth IRA, but I guess it’s necessary. Hit Continue.

This is another odd page, but I guess it’s an IRS requirement. I don’t need a notice saying Vanguard is not going to withhold taxes that aren’t owed anyway, but you can get one if you want. Then hit Continue.

This is your review page to double-check before submitting the order. The astute observer will notice this form says the conversion amount is $8,000. That’s because I used screenshots from both Katie’s and my Roth conversion this year. One of us turned 50 this year, and so they’re eligible for a $1,000 catch-up contribution for the first time. Your conversion amount should be about the same as your contribution amount. If you have a few dollars extra in there from earnings while sitting in the traditional IRA, convert those, too. You’ll owe tax on those few dollars, but I’m sure you can afford it.

This is just the confirmation page. Go ahead and hit Exit. Note that it says you may have to wait two days for the conversion to be complete. That wasn’t the case for me. The money was immediately available to invest, so I did.

Don’t forget to invest your Roth IRA money, or it’ll just sit in cash.

More information here:

Pennies and the Backdoor Roth IRA

How to FIX Backdoor Roth IRA Screwups

Step 3: Choose Vanguard Roth IRA Investments

Go back to the page that lists all your accounts and click on the Roth IRA account.

Click on Transact and then “Buy Vanguard mutual fund” (or whatever you want to invest in), and you’ll go to a page where you can do so. Mine looked like this.

This entire Roth IRA is already invested in the Vanguard Real Estate Index Fund, so this new contribution will go there as well. I hit Buy, and it takes me to this page.

I put in $8,000 ($7,000 when doing Katie’s Roth IRA), hit “Continue order,” and move on to the next page.

Once more, you have to hit “Preview order” and move on to the next page. I like the new section here where Vanguard updates you on where you stand for this year’s and last year’s IRA contributions.

Here’s the confirmation page for your trade/order.

That’s it, you’re done until next year. Don’t forget to do a spousal Backdoor Roth IRA if available.

The process will be slightly different at Fidelity, Schwab, and other IRA custodians, but the basic steps will remain the same.

If you have a question about the Backdoor Roth IRA and not Vanguard 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 is answered there.

What do you think? Do you do your Backdoor Roth IRA(s) at Vanguard each year? What problems have you run into? Any questions? 

[This updated post was originally published in 2021.]