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Why is transferring a 401k to another custodian so tedious and risky?
Posted on 11/5/21 at 12:11 pm
Posted on 11/5/21 at 12:11 pm
Trying to roll over funds from a prior employer and the process is pretty ridiculous. Basically need to have a check mailed to me and then forward the check over to my new provider within a certain time window to avoid issues with taxes. The latter is not a big deal but the former is mildly terrifying to temporarily entrust the stewardship of a significant portion of one's net worth to a postal worker or FedEx delivery worker. My retirement account is only about $20, can't imagine what it must be like for all the multi-millionaires on here.
6
Posted on 11/5/21 at 12:18 pm to Lou Pai
I’ve been doing this for a long time and I’ve never seen a rollover check go missing. I’m sure it happens though.
That being said, yeah, the process leaves a lot to be desired in the modern world. I suspect it works that way at most places due to the potential liability - mailing a check to the account owner that’s payable to the new custodian makes sure that the check is deposited into the proper account(s) with the proper registrations. It’s not like you can accidentally deposit into a non-qualified account or something.
That being said, yeah, the process leaves a lot to be desired in the modern world. I suspect it works that way at most places due to the potential liability - mailing a check to the account owner that’s payable to the new custodian makes sure that the check is deposited into the proper account(s) with the proper registrations. It’s not like you can accidentally deposit into a non-qualified account or something.
Posted on 11/5/21 at 12:32 pm to slackster
My tinfoil hat theory is that the asset managers have worked together, and in concert with the IRS, to make it difficult and a little anxiety-inducing on purpose. To dissuade you from switching.
Going to be watching my mailbox like a hawk for my $19.87 check. Can't imagine relying on that at an apartment complex or something.
Going to be watching my mailbox like a hawk for my $19.87 check. Can't imagine relying on that at an apartment complex or something.
Posted on 11/5/21 at 12:41 pm to Lou Pai
, maybe so. Ultimately, unfortunately there are more than a handful of ways to frick them up, so making it deliberate is understandable.
Posted on 11/5/21 at 6:22 pm to Lou Pai
I moved years ago, I didn't even get a check direct to me, went from the BS place that was chosen by my former employer all electronically, or maybe they sent a check to the new place. Made no difference to me, fee's were insane at the old place... I think it was T. Row Price, it was several % points just for a mutual fund account.
Posted on 11/5/21 at 7:25 pm to Lou Pai
My settlement check was mailed 10/15. It is a large check, I still have not received it. It happens!
Posted on 11/5/21 at 7:38 pm to Lou Pai
quote:
Basically need to have a check mailed to me and then forward the check over to my new provider within a certain time window to avoid issues with taxes.
almost all of them will transfer the money straight to the new custodian
Posted on 11/6/21 at 1:03 am to whiskey over ice
Have done it twice now and have not gotten that option. Maybe they are trying to be difficult though, in line with the general premise of my thread?
Posted on 11/6/21 at 8:44 am to Lou Pai
I’ve had to do it both ways. The mail me the check and I sign it over or they cut the check directly over to new company. Either way is retarded. Just cash out all investments and wire it like we do everything else.
Posted on 11/6/21 at 9:33 am to Lou Pai
It’s to protect against fraud. You wouldn’t want someone getting a check mailed without multiple levels of authorization. The company sending the check has authorized you on their end through multiple security questions and voice (make sure it’s not a woman/man speaking when it’s suppose to be the opposite) and on the end of the other agent company that it’s getting sent to that everything matches what has been said or set up.
But most of that is starting to be old. A lot of the time now they are still doing that but will send directly (ACATS) to the new custodian.
But most of that is starting to be old. A lot of the time now they are still doing that but will send directly (ACATS) to the new custodian.
This post was edited on 11/6/21 at 9:36 am
Posted on 11/6/21 at 10:09 am to Lou Pai
One of the luckiest things that ever happened to me was due to these checks. I had initiated a transfer from an old company 401k account to my vanguard account early last year. My check was in the mail during the market drop.
Btw Vanguard was happy to handle most of the transfer process for me. Was pretty painless.
Btw Vanguard was happy to handle most of the transfer process for me. Was pretty painless.
Posted on 11/6/21 at 11:27 am to wheelr
That's awesome. I thought about that when the market dropped as I had just done a transfer a few months prior.
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