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Spouse and I decided to finally consolidate our retirement accounts in Vanguard roll-over IRAs. What an interesting and frustrating experience. Fidelity was by far the worst. They wouldn't do a direct transfer - only a check to us for us to send on. Worst was the need for a Medallion Signature Guarantee. You can only get those from financial institutions where you have a relationship. We do our banking online. Fortunately, Fidelity has an office an hour away on a good day. So we went there. Lots of forms to notarize too, but our town clerk does that.
Moral of the story is that roll-overs are sometimes not easy and not quick, and mistakes can have huge tax consequences so plan ahead!
I don't think this is uncommon because any rollover from one institution to another requires forms and notarizing to avoid fraud and tax scams. The most common thing people do was trying to cash out a 401k and avoid paying the fines and taxes. So what Fidelity was doing was part of the new banking regulations set by the Feds to regulate mortgages and 401k tighter. Too many people cashed out their 401k checks and avoided paying taxes and fines. Same with mortgages that people were signing up mortgages for fake properties.
I had rolled over 401k before so I know what the process is and every institution on the receiving end will treat you like royalty.
I rolled over my 401k into an IRA after I quit my job. Even with some cash out the process was fairly seamless. Of course since the 401k and the IRA were both administered by the same company (Empower Retirement) I didn't expect any issues.
Later on I rolled over the IRA into my TSP account. A bit more paperwork than the first rollover, but still nothing too onerous. Really the only issue was that after Empower closed the IRA (within 24 hours of me submitting the paperwork) and sending the check to the TSP, it still took almost two weeks before the TSP deposited the funds.
Something went very wrong for you. When I retired three years ago, I decided to simplify my finances. I had a 401k, an IRA at a bank, and an IRA at Vanguard. I wanted to consolidate at Vanguard.
It was easy as pie. Less than a day to make the arrangements, and a couple weeks later, everything was transferred and complete. No Medallion Signature required, which I had done many years ago for another purpose, and was a PITA.
I'm not sure where your process went off the rails, but let me assure anyone else thinking about this, Vanguard made it Very. Easy.
I do know what I'm doing, having done roll-overs before. No mistakes made. We contacted Vanguard first, and they did facilitate several transfers, but don't evidently have a good working relationship with Fidelity? (Would not be a surprise, given what rivals they are.)
The signature guarantee was a requirement of the former employer, we were told. Spouse had two separate accounts under the same employer. Seems to be common with Universities - I had three! Each account had to be handled separately.
Yes, most funds do direct transfers. TIAA did so. Fidelity said they would would not do a direct transfer to Vanguard - only a check to us made out to Vanguard. We got the check Friday and sent it on.
JGHorton, all I can say is wrong. No taxable event, although even if the check had been made out to us (with 20% withholding) we still could have avoided a taxable event at some cost.
So what Fidelity was doing was part of the new banking regulations set by the Feds to regulate mortgages and 401k tighter. Too many people cashed out their 401k checks and avoided paying taxes and fines. Same with mortgages that people were signing up mortgages for fake properties.
Actually, this had nothing to do with new regulations. It was an internal Fidelity decision, and an employer decision for the signature guarantee.
The IRS has had rules in place for years (decades?) to prevent people from cashing out without paying taxes. Start with reporting of the transactions to the IRS. Add in the requirement for a minimum of 20% tax holding, 1099-R forms and such.
Spouse and I decided to finally consolidate our retirement accounts in Vanguard roll-over IRAs. What an interesting and frustrating experience. Fidelity was by far the worst. They wouldn't do a direct transfer - only a check to us for us to send on. Worst was the need for a Medallion Signature Guarantee. You can only get those from financial institutions where you have a relationship. We do our banking online. Fortunately, Fidelity has an office an hour away on a good day. So we went there. Lots of forms to notarize too, but our town clerk does that.
Moral of the story is that roll-overs are sometimes not easy and not quick, and mistakes can have huge tax consequences so plan ahead!
I had a terrible experience with Vanguard trying to consolidate several accounts - they also required MSG. I had one brick and mortar bank specifically for such purposes and of course they stopped doing them. It took a couple months to make all the transfers - a nightmare.
they have been introducing policies that seem to push people more and more in to the services they offer and promote .
they quietly deleted all beneficiaries from joint accounts . when questioned why , the answer was they feel we all would be better served with a trust -whether we need one or not . then they just happen to promote their trust dept .
in my case we were doing an acat transfer and we needed to speak to that dept , with our bank on the line because we had a question .
we got passed around like a hot potato and no one wanted to just run with the ball .
the last number they passed us to gave us a message to hold for the next rep . we put them on speaker phone and did all our other paper work , called in on 2 other lines and after an hour and 15 minutes we hung up .
we ended up figuring it out on our own .
in the mean time in 30 years with fidelity , one person takes our question , runs with the ball to whomever and calls us back .
I agree. When I rolled my 401k into a Fidelity IRA, it was very simple. A few phone calls between Fidelity and me, a few docs shuttled back and forth, and it was done.
For my company it was a disaster... rolling into Fidelity and I was the first one that signed up and completed the paperwork and handed it to the Fidelity rep.
Months later still nothing... others had been transferred and saw pay check contributions but about a third of us were told to be patient.
You know how they record when you call... I told them I sure am glad for the recordings because it will clearly document my efforts...
So when it was all said an done... the Fidelity rep I and all my co-workers worked with on the first day never submitted the paper work... unbelievable... he left Fidelity and we were collateral damage.
Once that was done... I complained to HR of missing 4 months of company match... said I and others would take it to ERISA... well, our little voices were heard.
I'm not well versed in these plans but my experience has been less than satisfactory going back 20 years...
Our old plan was frozen... and I kept asking where the money was... no answers... finally, a co-worker retired and wanted her money for IRA rollover and only then did we learn the funds were sitting dormant and had been assigned to another employer that we had no connection with...
To OP advice to stay on top of things is well taken...
I've had a Schwab Account since 1980... Charles Schwab knew my brother by name... the man, not the company... and said his Schwab 1 account was no fee and to build a life long relationship... I never forgot it as Dean Witter and Lynch were always come up with fees.
Last edited by Ultrarunner; 01-07-2018 at 12:32 PM..
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