Retired and still holding onto 401k because....

[jazz4cash]

I mentioned I had two 401k’s but one was not retiree friendly. Both plans managed by Fido. The 2nd plan was a result of my division being spun out of megacorp. I think we lost a lot of leverage with Fido when we were no longer under mega. They started charging fees that were not assessed when I was active. I presume mini-Megacorp paid the expenses for active employees only. The fees were for quarterly maintenance and one-time withdrawals. The offerings were decent but no Stable Value Fund. They had encouraged us to roll everything into the new plan and I am SO glad I did not.

 

[c998877]

I still have mine (almost 6 years retired) because the gold medallion signature process Vanguard insists on is a pain.

 

[monte1022]

I still have mine (almost 6 years retired) because the gold medallion signature process Vanguard insists on is a pain.

This was required when we moved DW's 401k to Fidelity. We used an online medallion signature company. The price was a few hundred bucks and the process of getting the signature was relatively seamless. What was not seamless was the snail mail method required for transfer forms between brokers. Basically we sent the forms via USPS to her old employer's plan then waited weeks for Fidelity to credit her new account. It was a bit disconcerting to see several hundred thousand disappear from the old account without knowing if the funds would make it to the intended destination.

Fortunately, all of my accounts including the 401k are at Fidelity. I cannot imagine a rollover being more than a phone call if I go that route.

 

[Koolau]

This was required when we moved DW's 401k to Fidelity. We used an online medallion signature company. The price was a few hundred bucks and the process of getting the signature was relatively seamless. What was not seamless was the snail mail method required for transfer forms between brokers. Basically we sent the forms via USPS to her old employer's plan then waited weeks for Fidelity to credit her new account. It was a bit disconcerting to see several hundred thousand disappear from the old account without knowing if the funds would make it to the intended destination.

Fortunately, all of my accounts including the 401k are at Fidelity. I cannot imagine a rollover being more than a phone call if I go that route.

Wait, what? Several hundred bucks to guarantee a signature? What's up with that?

 

[monte1022]

I could not find a local bank to do it. Even my credit union refused to take the liability. Sadly, the cost was $600.

 

[pb4uski]

I still have mine (almost 6 years retired) because the gold medallion signature process Vanguard insists on is a pain.

You can always do a total 100% withdawal from the 401k, which I am guessing does not require Medalion signature, into your bank account and and then do a rollover contribution from the bank account to a traditional IRA and it woudl not be a taxable event as long as it is done within 60 dyas and you haven't had another rollover contribtion within the last 12 months.

The hitch is that taxes will likely be withheld on the withdrawal and you would need to make up the taxes withheld from other funds and then wait to get a refund of the taxes withheld.

60-day rollover – If a distribution from an IRA or a retirement plan is paid directly to you, you can deposit all or a portion of it in an IRA or a retirement plan within 60 days. Taxes will be withheld from a distribution from a retirement plan (see below), so you’ll have to use other funds to roll over the full amount of the distribution.

 

[Koolau]

I could not find a local bank to do it. Even my credit union refused to take the liability. Sadly, the cost was $600.

Oh, my gosh!

I did sorta read up on the subject, and apparently there is liability to the institution who "verifies" the signature. But, most banks I deal with even know me by my shirt - if not my name (long story.)

 

[Koolau]

You can always do a total 100% withdawal from the 401k, which I am guessing does not require Medalion signature, into your bank account and and then do a rollover contribution from the bank account to a traditional IRA and it woudl not be a taxable event as long as it is done within 60 dyas and you haven't had another rollover contribtion within the last 12 months.

The hitch is that taxes will likely be withheld on the withdrawal and you would need to make up the taxes withheld from other funds and then wait to get a refund of the taxes withheld.

Do all the Big Houses require the Medallion signature verification? If only Big V, then that's yet another strike. Though - maybe they think it makes them a better House.

 

[Marc]

For Fidelity, we filled out the form; drove down to Fidelity office; wife signed in front of them; and they faxed it to the proper folks in Fidelity to facilitate the transfer. We did this twice. Both times nicely rewarded by Fidelity.

Marc

 

[Koolau]

For Fidelity, we filled out the form; drove down to Fidelity office; wife signed in front of them; and they faxed it to the proper folks in Fidelity to facilitate the transfer. We did this twice. Both times nicely rewarded by Fidelity.

Marc

Wish BIG V had an "office." Of course, I'd probably have to fly to it rather than drive. Good on Fidelity!

 

[whatnot]

As my 403(b) was at Fidelity, I, too, thought of leaving it in the 403(b). I decided to move it over about two years. First, Fidelity gave me pretty large bonuses for switching over $1M each time. Second, the index funds fee structure for regular investors came pretty close to matching my 403(b). Finally, my company ended up charging a maintenance fee for the fidelity account (actually I had mad my final transfer just before this fee was initiated).

If you are at one of the big brokerages, make sure you get rewarded for setting up your rollover IRA.

Marc

My DH retired 5 years ago and has retained his funds in employer Fidelity 401k. We met with Fidelity rep after he retired and they suggested we move funds to Ira because of more investment options. But we have low cost Fidelity index funds and bond funds so didn’t make the move because of 401k protections. We did move from the bond index fund to the Fixed Income option which was paying 1.9%, which was good at the time.
But now that CD rates are higher, thinking now is the time to rollover 401k to IRA in order to invest in CD’s for fixed portion of portfolio.

That being said, how do we ask for a Bonuses for move to IRA.?
Balance is $2 mill.

Thanks for any advice.

 

[Out-to-Lunch]

You can always do a total 100% withdawal from the 401k, which I am guessing does not require Medalion signature, into your bank account and and then do a rollover contribution from the bank account to a traditional IRA and it woudl not be a taxable event as long as it is done within 60 dyas and you haven't had another rollover contribtion within the last 12 months.

The hitch is that taxes will likely be withheld on the withdrawal and you would need to make up the taxes withheld from other funds and then wait to get a refund of the taxes withheld.

+1, but with a small correction. When coming from a 401(k), you do not face the one-per-12-mos. limit on indirect rollovers. That only applies to IRA-to-IRA indirect rollovers.

 

[pb4uski]

+1, but with a small correction. When coming from a 401(k), you do not face the one-per-12-mos. limit on indirect rollovers. That only applies to IRA-to-IRA indirect rollovers.

Interesting. Didn't know that. I stand corrected.

Too bad that there isn't a way to elect out of federal income tax withholding in such situations.

 

[Romer]

before I retired I could access funds, transfer funds, withdraw funds with a few clicks

Now I can't. They said they needed to send me forms to have my WIFE and I notarize even though before it was just me.

I decided to wait and maybe that was their strategy (probably not)

Thinking about moving forward now that TD Ameritrade transfer to Schwab is complete

 

[Out-to-Lunch]

Interesting. Didn't know that. I stand corrected.

And see post #18.

https://www.early-retirement.org/forums/f28/retired-and-still-holding-onto-401k-because-119183.html#post2982972

 

[pdxgal]

I still have mine after almost nine years of retirement for the same reasons. Also, my Vanguard funds are charged with the Institutional Rate.

+1. Thanks to OP for posing the question, I've often wondered about this myself, 2 years into ER.

 

[pdxgal]

...Also, a recent thread suggested that a rollover IRA from a 401k continues to have ERISA protections as long as you don't taint it with other IRA money or contributions.
...

My understanding is that the protection is based on recent case law in California (https://matsorensen.com/self-direct...-can-receive-erisa-style-creditor-protection/). And case law can be overturned or interpreted otherwise, as we've seen in recent SCOTUS rulings. So for now I prefer the ERISA protection.

 

[Alex The Great]

My understanding is that the protection is based on recent case law in California (https://matsorensen.com/self-direct...-can-receive-erisa-style-creditor-protection/). And case law can be overturned or interpreted otherwise, as we've seen in recent SCOTUS rulings. So for now I prefer the ERISA protection.

But opposite is not protected under ERISA, correct? I mean the funds not contributed by employer but rolled over from IRA to 401K?

 

[whatnot]

As my 403(b) was at Fidelity, I, too, thought of leaving it in the 403(b). I decided to move it over about two years. First, Fidelity gave me pretty large bonuses for switching over $1M each time. Second, the index funds fee structure for regular investors came pretty close to matching my 403(b). Finally, my company ended up charging a maintenance fee for the fidelity account (actually I had mad my final transfer just before this fee was initiated).

If you are at one of the big brokerages, make sure you get rewarded for setting up your rollover IRA.

Marc

How did you get the bonuses? DH has 2 mill in Fidelity 401k. We are now considering moving it to Ira in order to access CD’s.
What would be considered an appropriate Bonus?

Thank you in advance for any advice.

 

[BruinBones]

I am holding on to my TSP for the relatively low (no longer the lowest) expenses ratios, the G-fund (currently at a Stable-Value-Fund-like rate of 4.25%), and to use for rebalancing my portfolio. I will probably transfer it all into my IRA when it is time to withdraw.

 

[DangerDad]

My 401k and Keogh are at Schwab. Taxable brokerage at Vanguard. I’ve considered rolling over from Schwab to Vanguard in order to streamline—I value simplicity. On the other hand, I like the Schwab funds and those assets are happy and cozy over there. At this point I’ve decided to leave well enough alone.

 

[pb4uski]

Why not do the opposite?... roll your taxable brokerage from Vanguard to Schwab. Everything is under one roof that you are comfortable with. Easy peasy.

 

[Marc]

How did you get the bonuses? DH has 2 mill in Fidelity 401k. We are now considering moving it to Ira in order to access CD’s.
What would be considered an appropriate Bonus?

Thank you in advance for any advice.

I think I heard here on ER and asked my Fidelity rep. I was also able to find on Fidelity website. I would start with your rep. If you have $2M at Fidelity even if all at Net-Benefits I would make sure to get rep.

Marc

 

[Alex The Great]

My 401k and Keogh are at Schwab. Taxable brokerage at Vanguard. I’ve considered rolling over from Schwab to Vanguard in order to streamline—I value simplicity. On the other hand, I like the Schwab funds and those assets are happy and cozy over there. At this point I’ve decided to leave well enough alone.

Don't do that. Seriously. Vanguard's customer service is virtually non-existent and their interface is terrible. They still have some great funds but I would avoid them at any cost.
My favorite is Fidelity but Schwab is OK too.

 

[Scout]

Don't do that. Seriously. Vanguard's customer service is virtually non-existent and their interface is terrible. They still have some great funds but I would avoid them at any cost.
My favorite is Fidelity but Schwab is OK too.

Second that