Why is rolling over a 401k to a new job so difficult?

Joemonkey

Diamond Member
Mar 3, 2001
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I filled out all the paperwork my old employer's 401k company requires to get the check sent. New 401k provider has the check, but says I need to fill out a form and have my prior plan administrator fill out a form to get the check deposited into my new 401k. However, my old company has been bought out and sort of no longer exists.

If they have the check, I would assume just by logic that the old plan is OK with rolling it over into the new one...

Now I have to fill out more paperwork from my old employer's 401k to get a letter of determination sent to me to send to the new 401k provider. Wouldn't you think all this would be necessary before they actually send the check?
 
Oct 20, 2005
10,978
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I had the same stuff going from my old employer to mycurrent one. Lot of paper work involved. very annoying.
 

GasX

Lifer
Feb 8, 2001
29,033
6
81
when you leave a job, take your 401k money and transfer it into an IRA. Repeat every time you change jobs and eventually your self-directed IRA will be your main retirement account.

The big advantages to this are that you can seek professional advice for your portfolio and are not limited to a small number of funds as investment choices.
 

FoBoT

No Lifer
Apr 30, 2001
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fobot.com
did you consider rolling the old 401(k) into a self directed IRA instead of the new 401(k)? too late now i suppose
 

DaveSimmons

Elite Member
Aug 12, 2001
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Yes, next time go to www.vanguard.com and see their instructions for setting up a rollover IRA.

Get one or more of their excellent stock index mutual funds with no trading fees. There are minimum-balance fees ($10/year if total balance below $5K, per-fund $10/year) but a company IRA can have hidden annual fees along with often a second-rate choice of funds.
 

SuperNaruto

Senior member
Aug 24, 2006
997
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Like Dave said, vanguard is soo much better... if you got over 100k, they have a specialist do it for ya..

I roll my into vanguard, they're much better at investing your money than a paychex 401k guy..
 

minendo

Elite Member
Aug 31, 2001
35,553
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Originally posted by: DaveSimmons
Yes, next time go to www.vanguard.com and see their instructions for setting up a rollover IRA.

Get one or more of their excellent stock index mutual funds with no trading fees. There are minimum-balance fees ($10/year if total balance below $5K, per-fund $10/year) but a company IRA can have hidden annual fees along with often a second-rate choice of funds.
Exactly what I did. Quick and painless. Dumped all of my funds into VFINX.

 

GasX

Lifer
Feb 8, 2001
29,033
6
81
real life example:

My IRA is with Smith Barney. My 401k from my last job was though Fidelity. My advisor got it transfer with a phone call. It's good to have people.
 

RaiderJ

Diamond Member
Apr 29, 2001
7,582
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Having issues as well rolling over my previous companies 401k into my new company. Mostly because the new HR department consists of morons.
 

Joemonkey

Diamond Member
Mar 3, 2001
8,862
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I'm using the company 401k because I'm lazy and they match 100% of up to 6% of what I put in.

I called the old 401k people and they have a "letter of opinion" they are sending me that "should be sufficient" to get the money transferred into my new 401k... the letter looks like it was scanned in and the dates on it are 2001, so we'll see
 

FoBoT

No Lifer
Apr 30, 2001
63,089
12
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they are going to match your rollover? are you sure? so if i start working at your new company, and bring my $100,000 401(k) , they'll give me $100,000 match? :Q :Q
 

CTrain

Diamond Member
Sep 26, 2001
4,940
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Originally posted by: Joemonkey
I'm using the company 401k because I'm lazy and they match 100% of up to 6% of what I put in.

I called the old 401k people and they have a "letter of opinion" they are sending me that "should be sufficient" to get the money transferred into my new 401k... the letter looks like it was scanned in and the dates on it are 2001, so we'll see
I don't think your new company is matching any of the previous 401K you're rolling over.

Like everyone else said, the best part about leaving your old job is you get options with your 401K funds.
Personally, I would roll it to an IRA funds and then ROTH.
Roth was only started in 1998 and such a limited amount you can contribute to it but when you rollover from a traditional IRA, you can rollover as much as you want.(I believe).

If you were 21 right now and just max out your ROTH every year($4K right now with increment of $500 in later year). At 65 and 8%, you would have about $2 millions and all that is TAX FREE when you pull out.

 

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