I retired about 6 months ago and left my 401k at my employer without making any changes (obviously no further contribution activity).
As the new year came, I wanted to make sure that I could withdraw funds if I needed for supplemental cash needs. I logged into my Vanguard account and found that Withdrawals are NOT allowed.
Upon calling Vanguard they said I could take a full distribution or roll it over to an IRA, from which I could self manage or withdraw funds as needed.
I chose to open a Vanguard brokerage IRA account to roll over the funds to. It was very easy to do and the phone rep walked me thru it while I was in my account online. Funds and assets (in kind except for any proprietary portfolios) will be in the brokerage account in 2 days.
I guess I had assumed that leaving assets in my 401k after retirement would be accessible. No one at my company HR department nor Vanguard had ever informed me otherwise.
Do all 401k plans work like this post retirement or is this a provision of my company’s plan or Vanguard rules?
RE2, thanks for the heads up. No non-deductible contributions were ever made in my 401k. Also plan did not include “rule of 55”. I had actually did “in-service “ withdrawals of most of my IRA funds a few years before I retired in order to reinvest this large portion of my assets more strategically for retirement. I stayed in the plan with the generous company match until retirement. There really is no benefit of staying in the plan post retirement based on the restrictive rules that apply to my plan.OP...moving a 401k to an IRA can be a bad idea in some situations. If you have ever made non-deductible contributions to an IRA in the past, moving a large 401k to a tIRA can make it nearly impossible to recover your basis in the IRA. Remember that an individual only has one IRA, regardless of the number of IRA accounts you may have. My 401k has never been moved, even after 24 years of retirement.
Also, you never mention if your plan included the "Rule of 55" where withdrawals can be made from the 401k without incurring early withdrawal penalties. To withdraw from TIRA, you must generally be over 59.5 without incurring a penalty tax.
Koolau, yes I was surprised too especially after having taken in-service distributions (2 per year were allowed) to move funds to an outside IRA account while I was working.I treat my 401(k) like a bank - except I can't make deposits. When I need cash, I request an exact amount (pay the 20% taxes up front) and the money is in checking within 2 or 3 days. I'm surprised that you can't take withdrawals but I guess I'm spoiled by my 401(k).
Koolau, yes I was surprised too especially after having taken in-service distributions (2 per year were allowed) to move funds to an outside IRA account while I was working.
I knew there was an echo in here. Here's an identically named thread from 2020:
https://www.early-retirement.org/forums/f30/401k-after-retirement-105554.html#post2484820
I knew there was an echo in here. Here's an identically named thread from 2020:
https://www.early-retirement.org/forums/f30/401k-after-retirement-105554.html#post2484820
yes, just do some digging into your account on their web site.
often it is under the transactions .......you will see the fees they take out without your knowledge.
I have helped many of my employees and friends with this. You will be amazed and ticked
Couldn't find any fees. Did the math on the contributions and the shares bought with the closing price. Check the expense ratios, the performance, the activity, and the stmts. All looks good.
Smaller companies often have a "bad deal 401k" to escape from ASAP. The company I was working for when the music stopped was a huuuuge conglomerate, and as such, had low fees and a guaranteed income fund that can't be matched in an IRA.
But, unlike the OP, I can pull out whatever dollar amount I want. It would certainly be harder to stay with the old employer's plan if it were an "all or nothing" proposition.
I agree that this is the right thing to do 401ks that have high fees and/or poor investment options. But this is not the case for all plans. My megacorp 401k offers index funds with very low fees, on par with Vanguard and Fido. So I've had no reason to move the money.
Can you share that company with us.........I would like to look them up. It is sort of a hobby of mine to see what companies have the best retirement plans.
Thanks