Navigating the Archaic, Convoluted, Confusing, and Utterly Enraging 401(k) Rollover Process

I have attempt­ed to rollover my pri­or 401(k) accounts in the past few weeks. As you can tell from the title, every­thing has gone smooth­ly and eas­i­ly. HA! Just kid­ding. It’s been awful. For­tu­nate­ly for all of you, I took detailed notes on the whole process. If any Van­guard or Fideli­ty exec­u­tives read this post, sor­ry not sor­ry. This whole process SUCKS. 

For the sake of sim­plic­i­ty, I will be refer­ring to each account as the fol­low­ing so as not to con­fuse any­one. Since I am an over­achiev­er, I tried to do 3 dif­fer­ent accounts at once. It’s fine. I’m total­ly fine. 

Account A: My $200,000 401(k) from my first com­pa­ny. I was there for 5 years and maxed it out all 5 years. It’s grown nice­ly. Let’s call this one “Prime” for my pri­ma­ry retire­ment sav­ings. No pres­sure on get­ting this rolled over.

Account B: My $4,000 rollover IRA from the sec­ond com­pa­ny I worked for. I was there for 6 months. A nice bal­ance to have but noth­ing like Prime. Let’s call this one “Tri­an­gle”. 

Account C: My $2,500 401(k) from the third com­pa­ny I worked for. I was employed there for 7 months before I left DC and moved to St. Louis. Let’s call this one “South­down”. 

A Rant About Rollovers

Before we get into the details of each account expe­ri­ence, let me just rant about the whole rollover process. You’re telling me, in 2022, that I need to call a human being on the phone and have them cut a phys­i­cal check that will be sent to me so I can send it to my cur­rent employ­er’s ben­e­fit cen­ter!? Don’t we have things like the inter­net that can be used to move mon­ey around!? Why are we send­ing bits of paper in the MAIL? There are so many dif­fer­ent points of fail­ure with this whole process that it’s not even fun­ny. There is absolute­ly zero rea­son this process needs to be so man­u­al. None.

Initiating the Process*

*expe­ri­ences may vary due to spe­cif­ic employ­er requirements. 

Before I start­ed the process with my old accounts, I called my employ­er’s ben­e­fit cen­ter to see what I need­ed to do. It turns out this was a great idea as they have to send me a paper form to fill out and mail back with the paper­work from the oth­er insti­tu­tions. I got one pack­et of papers that I then copied into 3 sep­a­rate sets of paper­work, one for each account I was going to roll over. 

The lan­guage in this paper­work was con­fus­ing for me to read the first few times I attempt­ed it. I am a mon­ey-savvy per­son who is used to read­ing about mon­ey and the var­i­ous kinds of accounts. To con­fuse me means the aver­age Joe is going to have a hard time with the process. There is a lot of room for improve­ment in the process. A LOT. Did I men­tion this whole process was awful!? 

Rolling Over Account A

The 401(k) account Prime has lived with Fideli­ty since its incep­tion. I kept it at Fideli­ty since the fees were super low and the invest­ment options numer­ous. Also since I was­n’t plan­ning on going back to work when I left that com­pa­ny, I did­n’t see a rea­son to roll it over to a new account and I did­n’t want to have all that mon­ey in an IRA in case I need­ed to do a back­door IRA rollover. Now, how­ev­er, I feel like sim­pli­fy­ing the num­ber of retire­ment accounts is worth the has­sle. The jury is still out on that. 

To start the process, I went online to their web­site. The web­site gave me a num­ber to call. After nav­i­gat­ing through the phone tree, I final­ly reached a human who told me they’d need to send me a check that I would then send to the final des­ti­na­tion. WHY.  Then the cus­tomer ser­vice rep fol­lowed their script and asked me a whole bunch of ques­tions on invest­ment strate­gies and tried their best to get me to keep my mon­ey at Fideli­ty. Ugh. Unfor­tu­nate­ly, I called after the close of the mar­ket on the East Coast, so I had to wait until the next day to sell all my invest­ments and put the mon­ey into a set­tle­ment account so they could issue the check. 

They were also able to send me the plan doc­u­men­ta­tion for this 401(k). 

Once the check and plan doc­u­men­ta­tion arrived in my mail­box after a nerve-wrack­ing week, I filled out the forms from my cur­rent employ­er, put the check and paper­work in the mail, prayed, and waited. 

Rolling over Account B

Tri­an­gle start­ed out as a 401(k) account, but when I left the com­pa­ny they deemed it too small to deal with, so they auto­mat­i­cal­ly rolled it over into an IRA. Thanks, Vanguard. 

First, I went to their web­site. The web­site was down, so I called their num­ber. I ver­i­fied my iden­ti­ty to the first per­son, but they were unable to assist me. They trans­ferred me to some­one who could, who then re-ver­i­fied my infor­ma­tion. I had to login to the Van­guard web­site and start a form that the ser­vice rep could then fill out for me. We only got so far before the lack of cash in the set­tle­ment fund stymied us for that day. Three days lat­er, I called back to con­tin­ue fill­ing out the form. When I asked about the doc­u­men­ta­tion required by my cur­rent employ­er, they assured me the 1099‑R issued when the account rolled over would be suf­fi­cient. Spoil­ers: It was­n’t. At least Van­guard was able to mail the check direct­ly to the ben­e­fits cen­ter with­out using me as the middleman. 

After the form was filled out, I thought I was all done until I need­ed to send the 1099‑R. Alas, it was­n’t meant to be. I got an email from Van­guard there was doc­u­men­ta­tion miss­ing from my rollover. After I called back in and did the whole ver­i­fy iden­ti­ty-trans­fer-ver­i­fy iden­ti­ty dance, they informed me I was miss­ing the form to rollover the account to the Thrift Sav­ings Plan. Read­er, it was at this moment that I nar­row­ly avoid­ed absolute­ly los­ing my shit. I then terse­ly informed the rep the rea­son I was miss­ing the form was because the rollover was­n’t going to the TSP. I had to tell the rep what to write down as rea­son­ing for the form not to be attached since they did­n’t under­stand the sub­tle and con­fus­ing dif­fer­ences between my retire­ment plan and the Fed­er­al Gov­ern­men­t’s retire­ment plan. They real­ly are remark­ably similar. 

So after that was cleared up, I sent in the 1099‑R where it was hap­pi­ly accept­ed and they deposit­ed the check into my cur­rent 401(k). AHAHAHA psych. There were issues with this one, too. 

Rolling over Account C

South­down had remained as a 401(k) account with the unvest­ed mon­ey still in it. This one was also with Fideli­ty so I tacked this one onto the call for Prime. Since they already had all the infor­ma­tion from Prime, they knew what I need­ed and were able to send me the check and plan doc­u­men­ta­tion in an elec­tron­ic trans­fer. Just kid­ding — they mailed it along with the stuff for Prime. 

I plopped every­thing in an enve­lope, sent it through the mail, and wait­ed nervously. 

Stay tuned for the sec­ond part of this saga where every­thing goes wrong and I basi­cal­ly have to start over from scratch. Yay me.