Mechanics of Fidelity IRA Withdrawal

[MRG]

I'm confused about the difference. Do I get it? It used to allow the transfer to trigger a redeem and then the funds were transferred after they cleared? Now it's a two step process to redeem then clear to do the transfer request? Or did the funds magically transfer before they cleared?

 

[Katsmeow]

FWIW, I don't think 10 minutes is an inordinate amount of time to do it over the phone. It would take me longer than that to drive to my bank and make any deposit in person. It also would take me about that amount of time to open my computer, log into Fido, find the appropriate webpage (if it existed), fill out the form, double check all the inputs, click acceptance, save a copy of the form for proof/posterity and then close out the page.

10 minutes is fine for a phone call. This used to take 1 to 2 minutes to do online. Click on Retirement distribution. Click on the account name. Click on the bank account you want money to go to. Enter the amount. Then -- if you have no cash in the account -- you are asked what you want to sell to get the cash. Make the selection (check it). Tell them how much you want to withhold in taxes (if any). Confirm it all. There is no "form" to fill out so to speak you just go through the steps. Takes much less time than the phone call.

Can’t you issue the sell order and schedule the transfer a few days from now to permit time for settlement? That is still two transactions but a single web session.

No. Now -- if you don't already have cash in the account you have to do the sale. Wait for it to settle and the cash to appear in your account. Then, do the transaction to transfer the cash to your bank account. You used to be able to do this all in transaction.

I’m pretty sure Fidelity’s software program will not allow you to schedule a future transfer of cash when there is currently not enough cash in the account to complete the future transaction.

Well it did 2 weeks ago which was the last time I did you. Until sometime in the last couple of weeks you could schedule the cash withdrawal and tell them what to sell to get the cash. Of course, they don't transfer until they get the cash. But it was totally 100% routine to do this until now. (The representative on the phone seemed very surprised to find out you couldn't do this any longer).

I'm confused about the difference. Do I get it? It used to allow the transfer to trigger a redeem and then the funds were transferred after they cleared? Now it's a two step process to redeem then clear to do the transfer request? Or did the funds magically transfer before they cleared?

No you basically have it correct. You would initiate the transfer to your bank account. If you didn't have enough cash (I keep none) you are asked what you want to sell to get the cash. Once that occurs and settles then they send you the cash. It is very seamless and works fine. This new process will likely add at least a day plus having to do two transactions (I will probably just call even though that is a pain).

 

[jazz4cash]

I’m pretty sure Fidelity’s software program will not allow you to schedule a future transfer of cash when there is currently not enough cash in the account to complete the future transaction.

It looks like you are correct so my suggestion won’t work.

 

[georgemoe]

I talked to Fidelity. She didn't know why this was changed but did check with the back office who said it appeared to be a "website update." That means that is a permanent change unless they decide to change it later.

She was able to do the transaction for me over the phone which was fine but took time to get it done. It looks like going forward I have to sell first, wait for that to process and show up. Then, go in and do a transfer to my bank account.

The other alternative is to take 10 minutes and do it by phone.

I don't love either of these options. Doing it in two transactions is a pain and possibly results in a delay of getting the money (probably why they did this). The phone alternative is probably what I will do but it requires 10 minutes to do what I used to could do in 2 minutes.



Previously you could indeed put in the order while the market was closed. You could say sell X and then send the cash to my bank account. I did that before while the market was closed. It would be settled after the next trading day. Now you can't do that in one transaction unless you call them. You have to do a transaction to sell (which you can initiate while the market is closed). Wait for it to settle. Then do a transaction to send you the money. Such a PITA.

So to follow up with my situation. I decided not to call and just put in a sell order yesterday. By late in the evening the transacation showed pending. Early today it was settled in Cash and I proceeded with the withdrawal to Ally. Around 6PM EST the money was at Ally. So while it took a couple steps vs. the one step in October, the money was out of Fido and into Ally at least a day faster. In the end not that much of a PITA for me.

 

[Katsmeow]

So to follow up with my situation. I decided not to call and just put in a sell order yesterday. By late in the evening the transacation showed pending. Early today it was settled in Cash and I proceeded with the withdrawal to Ally. Around 6PM EST the money was at Ally. So while it took a couple steps vs. the one step in October, the money was out of Fido and into Ally at least a day faster. In the end not that much of a PITA for me.

To follow up with mine. I did it by phone yesterday around 1 PM. The money was in my bank sometime this morning. So it looks like doing it by phone is the fastest.

I am not sure what I will do next time. I don't like the 2 step process and since phone looks like it is a little faster I may just do that from now on. I don't do a lot of one time withdrawals so it may be awhile before I do another.