Fido to Vanguard 401k Xfer

[BooBoo]

Background: Already FIRED from mega corp and over 59.5

I started to transfer funds from mega corp 401K @ FIDO to Vanguard to consolidate funds. I called FIDO and they said I must have funds sent directly to me per mega corp rules. I would have preferred to do an direct transfer to Vanguard. During the process I saw an option to transfer to a IRA and went down that path. The only option is to a FIDO IRA ? I cancelled and started the path to withdraw funds. This time I was obligated to withhold taxes. I am planning on calling both FIDO and Vanguard today. All I wanted to do was a direct transfer from 401k to IRA without tax consequences. I realize I could open FIDO IRA and then transfer to Vanguard, an extra step that seems redundant. Any one deal with this before ? Your input is greatly appreciated.

Boo

[REWahoo]

Call Vanguard and tell them what you want to do. They should walk you through the process.

[Onward]

Most 401k's insist on cutting a check, rather than an electronic transfer.

So this is what I would do:

1. Open an (unfunded) IRA at Vanguard

2. Tell Fido you want to transfer your funds. They will send you some paperwork. Fill it out indicating a rollover to IRA, and give your Vanguard IRA account #.

3. Fido will postal-mail a check--usually to you, possibly to Vanguard. In either case, the check will be made out to Vanguard for your benefit.

4. Deposit the check in your Vanguard IRA.

401k -> IRA rollovers are generally more complicated than IRA -> IRA transfers, which can be done 100% electronically through the Automated Customer Account Transfer Service (ACATS) system.

[euro]

Quote:

Originally Posted by Onward Most 401k's insist on cutting a check, rather than an electronic transfer. So this is what I would do: 1. Open an (unfunded) IRA at Vanguard 2. Tell Fido you want to transfer your funds. They will send you some paperwork. Fill it out indicating a rollover to IRA, and give your Vanguard IRA account #. 3. Fido will postal-mail a check--usually to you, possibly to Vanguard. In either case, the check will be made out to Vanguard for your benefit. 4. Deposit the check in your Vanguard IRA. 401k -> IRA rollovers are generally more complicated than IRA -> IRA transfers, which can be done 100% electronically through the Automated Customer Account Transfer Service (ACATS) system.

I just did a very similar transaction (Fido run 403b) and this is exactly how the process worked. The check was made out to Vanguard, but sent to me (well, DW actually). We sent the check on to Vanguard and everything worked fine. No taxes were withheld, no fees.

[Aggie1999]

This is good information. I'll have a 401k to move over to IRA accounts later this year. I may go with Fidelity or Schwab for the IRAs instead of Vanguard. Having a large check go through USPS once is bad enough but to have to mail it on a second time is chancing fate...

[CaliKid]

Make sure Fidelity doesn't distribute it to you. I would call first thing and make sure that doesn't happen.

Perhaps you can roll from Fidelity 401k to Fidelity IRA and then go Fidelity IRA to Vanguard IRA!? That way it's like to like transfer between brokerages. Just a thought.

[bw5972]

Quote:

Originally Posted by BooBoo Background: Already FIRED from mega corp and over 59.5 I started to transfer funds from mega corp 401K @ FIDO to Vanguard to consolidate funds. I called FIDO and they said I must have funds sent directly to me per mega corp rules. I would have preferred to do an direct transfer to Vanguard. During the process I saw an option to transfer to a IRA and went down that path. The only option is to a FIDO IRA ? I cancelled and started the path to withdraw funds. This time I was obligated to withhold taxes. I am planning on calling both FIDO and Vanguard today. All I wanted to do was a direct transfer from 401k to IRA without tax consequences. I realize I could open FIDO IRA and then transfer to Vanguard, an extra step that seems redundant. Any one deal with this before ? Your input is greatly appreciated. Boo

Earlier this year I transferred 401k at FIDO to an IRA at E*Trade. I had to go thru the extra step you described:

1. 401k at FIDO to new IRA at FIDO
2. Direct transfer FIDO IRA to E*Trade IRA

Extra step added about 2 seconds to the process but avoided withholding/check to me etc...

It did take a few days for the funds to finally appear at the destination.

[wmc1000]

I got lucky with my transfer earlier this year. Had a 401K at Nationwide and got it direct transferred to Fidelity IRA. Not mega corp so possibly fewer hoops to jump through.

[rodi]

BooBoo - make sure you back out of whatever transaction you were doing that triggered the tax withholding. You do NOT want that. You are doing a trustee to trustee rollover - even though megacorp 401k insists on sending you the check. You should NOT have taxes taken out since you will never cash the check - you deposit it into the IRA that you're rolling it over to.

ReWahoo's suggestion to call vanguard is a good one. They will get on the phone (3 way call) with you and megacorp 401 and make sure it is done right. That's one place their customer service excels.

[jebmke]

I had a 401(k) with Fido. I first had them roll it to an IRA then later (several months for specific reasons) I had VG initiate a custodian transfer. I am not a big advocate of changing custodians and tax attributes at the same time.

In this case, I wanted FIDO to own the rollover process and the tax reporting. Since there is no tax reporting for the second step, custodian change, I had VG do that entirely. Since they were the recipient they were motivated to get it right.

[jebmke]

Quote:

Originally Posted by bw5972 Earlier this year I transferred 401k at FIDO to an IRA at E*Trade. I had to go thru the extra step you described: 1. 401k at FIDO to new IRA at FIDO 2. Direct transfer FIDO IRA to E*Trade IRA Extra step added about 2 seconds to the process but avoided withholding/check to me etc... It did take a few days for the funds to finally appear at the destination.

This is a "safer" way to do this. No WH, FIDO owns the rollover and the tax reporting for the rollover.

[LOL!]

I transferred my Fido 401(k) directly to my TDAmeritrade individual (solo) 401(k)) in less than 5 days the following way:

1. Monday sit in TDAmeritrade office and call Fido. Fido rep says "No problem we will mail you a check tonight made out to "TDAmeritrade FBO LOL!". Do you want overnight or regular mail?" Me: Regular mail. No withholding. No hassle. The phone call took less than 5 minutes.

2. Thursday: Check received in the a.m. mail. Drove to TDAmeritrade office and deposited it. Money was available to use before the market close on Thursday, but ...

3. Friday: Starting buying new assets in my solo 401(k).

By the way, this is a direct transfer custodian-to-custodian even though the check came to my house.

There are different reporting requirements (i.e. 1099-R) for 401(k)s and for IRAs. I eventually received a 1099-R for my 401(k) transfer (you may call it a rollover if you wish).

Furthermore, even though I did a transfer more than 12 months after I left my employer, my Fido 401(k) received some company matching about 8 months after I did the transfer. I was lucky I did not formally "close" the zero balance 401(k). I transferred the matching money out in another transaction.

[jazz4cash]

I move funds from Fido 401k to IRA accounts at various other institutions quite often. I usually initiate the xfer at Fido and get a check made payable to "New Institution, Trustee FBO <my name> " mailed to me. That makes it a direct transfer so no witholding. When Fido says your employer requires "x or y", get a copy of the Summary Plan Description and ask them to show you the paragraph. I've had several instances where they told me something that was incorrect.

[523HRR]

I rolled my company 401k at Fido to a Fido IRA. Same day transaction with one phone call. If I wanted to then move my Fido IRA to Vanguard, this would be as simple as initiating the IRA transfer through Vanguard. Direct firm-to-firm transfer is preferable to taking a distribution.

[gayl]

Quote:

Originally Posted by wmc1000 I got lucky with my transfer earlier this year. Had a 401K at Nationwide and got it direct transferred to Fidelity IRA. Not mega corp so possibly fewer hoops to jump through.

that's basically how I did it with 457 Hartford to Schwab IRA. Schwab walked me thru it in less than an hour. Wanted almost everything in same place & still under SIPC insurance (under 500k in each account: IRA, Roth, Brokerage, Legacy)

[stephenson]

After just having gone through this, my direction was 180.

I am consolidating with Fidelity - they were faster, easier, more aggressive, had better offerings, provided a guy who meets with me regularly by telecom with on-line account review by computer, AND, they paid me to transfer my money there. My counselor also worked for me to resolve mega-corp incompetence in paying me as they were supposed to do so. They also have on-line accessible models that allows me to "what if" both my income and my expenses. They also are very adept at holding my other investments, flowing the many bits and pieces of communications from more than a dozen funds.

I still have accounts at Vanguard - but, they, to me, are no longer in the same league as Fidelity.

Just an opinion.

[PatrickA5]

Quote:

Originally Posted by 523HRR I rolled my company 401k at Fido to a Fido IRA. Same day transaction with one phone call. If I wanted to then move my Fido IRA to Vanguard, this would be as simple as initiating the IRA transfer through Vanguard. Direct firm-to-firm transfer is preferable to taking a distribution.

Exactly what I did. Fido 401K to Fido IRA. Done overnight. I then initiated the direct transfer through Vanguard. That took maybe 10 days total. The whole process is pretty simple if you take that one additional step of setting up a FIDO Traditional IRA first.

[Rustward]

I wonder how this turned out for the op.

[BooBoo]

Quote:

Originally Posted by Onward Most 401k's insist on cutting a check, rather than an electronic transfer. So this is what I would do: 1. Open an (unfunded) IRA at Vanguard 2. Tell Fido you want to transfer your funds. They will send you some paperwork. Fill it out indicating a rollover to IRA, and give your Vanguard IRA account #. 3. Fido will postal-mail a check--usually to you, possibly to Vanguard. In either case, the check will be made out to Vanguard for your benefit. 4. Deposit the check in your Vanguard IRA. 401k -> IRA rollovers are generally more complicated than IRA -> IRA transfers, which can be done 100% electronically through the Automated Customer Account Transfer Service (ACATS) system.

Onward is correct.

I did not need to open IRA at Vanguard as I used an existing account. I am still waiting for my check to arrive as I elected snail mail. The option to transfer funds from Fidelity was not available on-line. You can transfer into FIDO electronically. I did run into one minor glitch, mega-corp required me to move a percentage of all my funds to Vanguard. I just wanted to move from cash account, but this was not allowed per mega-corp. I asked for reasoning, but customer service rep could not provide any reason.

Thanks to all for the help.

Boo