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.