401K Rollover?

Hey all. I retired in 2020. Looking to possibly roll our 401K into another investment or brokerage. This has to do a lot with the fact that I don't care for the structure of my current situation. I'm taking a partial 401 withdraw to buy my wife a new car. Submitted the paperwork to my plan who drug their feet. They have to submit to the brokerage company who issues the check. Was told the process would take 7-10 business days. Looking more like 14+now. Any help appreciated. I know the 401 is not really a liquid investment, but this is annoying.

 

I work with alot of 401K plans and 14 days is pretty reasonable. It's almost all due to the HR department of the Company and TPA they work with to review and process. Some are more sophisticated than others. Some TPA's are really slow to do anything, especially when there is a vesting calculation that has to occur. Once that occurs most custodians (company that holds the funds) disburse pretty quick. In some cases distributions are only processed monthly.

 

When I retired I rolled out of company plan into my own IRA with Vanguard.

I use QCDs to satisfy my RMDs. I make an online request and a check arrives about a week later.

 

That's nuts. Period. Check? This is 2024.

Select a good brokerage type, Fidelity who I like and trust - for 35 years now. But Vanguard. Schwab, LLP, etc and others have their strengths.

Immediately after selecting roll over the entire amount quickly. Then you are done. The money is yours, minus what you have to pay US if you take $$$$$ out.

 

Rollover to fidelity, then connect your bank to your brokerage so that further withdrawals are electronic, 2 days or so.

 

The 401 is in Vanguard. I’m satisfied with the brokerage. What is the advantage/disadvantage of an IRA vs the 401?

 

IRA it's your money in your control. Low fees and the investment world is your oyster.

"Looking more like 14+now." There's your problem. I can WD from mine next day.

401K you can select from some funds, some places you can have a 401K brokerage - but both the fees are higher and even though the money is yours, it seems like they control it.

 

Only difference is the 401K is Company sponsored vs the IRA is fully in your control. Generally, once you are no longer employed by the Company get your money out of there and into accounts you fully control.

 

Get the company out of your investments. I'd roll everything over to an IRA with a good brokerage, even if it's back with Vanguard. Many of the big houses will wave any transfer fees to get your business, so you should look at the others like Fidelity, Schwab etc. You can buy back into the same funds you have now, or you can choose better investments than what the 401k restricts you to.

 

Not sure if this counts, but I love the acorns app for savings/investments. You create a portfolio based on your goals and how aggressive you wanna be.

 

@szidls If you don't have experience with controlling your own investments. I would recommend consulting with a licensed professional at whatever brokerage you end up going with to help you choose the right places to put your investments. There are also smaller "independent" brokers that would be a viable option. If you go that route I also recommend using a broker that charges a fee based service instead of a commission based service. Knowledge is power, so do your research. Here is an article that was in the Epoch Times this morning, on why not to move to an SD-IRA. I do still think it's better to get away from the company 401k plan, regardless of who the company is.

https://www.theepochtimes.com/bright/5-reasons-to-avoid-self-directed-iras-5613649

 

What you write makes total sense.

That article on the other hand is not really related to the discussion - or worse is using terms without defining properly. Self directed brokerage account in a 401K is something different than the meaning for self directed IRA for example. And no one here is advising such a thing, and it's a thing almost no one does. We are advising to move into a rollover IRA.

https://www.investopedia.com/terms/s/self-directed-ira.asp

https://www.investopedia.com/terms/r/rollover-ira.asp


I guess I'm just commenting on this because it might needlessly muddle up an otherwise straightforward event that most all people do extremely safely for FREE when they retire.

 

I think you miss read the article, I don't think it ever mentioned anything about a 401k or Self directed brokerage account in a 401K. It is simply listing five reasons a person not already in a self directed IRA account, might not want to enter into a self directed IRA account.

 

The article did not directly mention 401K, correct. But this thread did. My point is: why bring up a self directed IRA here?

 

IRAs are typically self-directed unless you sign on with a financial advisor to help you direct where your IRA is invested. Most of us here are suggesting that @szidls, leave his companies 401k for an IRA. He can self-direct it if he want's to, but I recommend he finds a FA that he likes to help him unless he already has the knowledge to direct it himself.

 

Well yes and no. A SDIRA is a very specific legal thing. See my link above. It's slightly more than semantics, please bear with me.

"A self-directed individual retirement account (SDIRA) is a type of individual retirement account (IRA) that can hold various alternative investments normally prohibited from regular IRAs.

You and the article advised to avoid for the reasons listed. Makes sense. I merely said it fogged the issue.

And you are correct, most/many of us make our own financial decisions with the monies in our IRAs. This is normal in an IRA but these are not called SDIRAs.

 

My wife and I both have Fidelity and Vangard accounts for our IRAs.

Some may disagree with this but I like to keep a small chunk in a savings and CD account with my credit union. The interest / yield is lower but I like knowing I can get cash or a bank check on any business day if there is an emergency.

The dollar amount of the chuck (if any) will vary depending on the person.

On a side note, if you are approaching age 73 you must start taking money out of your retirement accounts.

https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs