Time to transfer 401K to Vanguard - help please.

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Gort
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Time to transfer 401K to Vanguard - help please.

Post by Gort » Sun Jun 08, 2014 11:15 am

Friends,
I will be transferring my 401K to Vanguard in a couple of months. My 401K funds are non-Vanguard funds and I desire to have only Vanguard funds in the IRA.
Here are my questions:
1. Where does Vanguard put the money after the transfer? Do they put it in funds I have pre-selected prior to the transfer -or- do they put it in a Vanguard money market fund and I reallocate to desired funds later?
2. At the time of transfer, will Vanguard liquidate the various 401K funds and put the proceeds into my Vanguard account?
3. Would it be better (less chance of error in the transfer) to have all my 401K balance in one fund (such as a money market fund) prior to the transfer?
Thanks much!
Gort

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whaleknives
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Re: Time to transfer 401K to Vanguard - help please.

Post by whaleknives » Sun Jun 08, 2014 11:48 am

"I'm an indexer. I own the market. And I'm happy." (John Bogle, "BusinessWeek", 8/17/07) ☕ Maritime signal flag W - Whiskey: "I require medical assistance."

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NAVigator
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Re: Time to transfer 401K to Vanguard - help please.

Post by NAVigator » Sun Jun 08, 2014 11:52 am

I think the easiest way to start is to contact Vanguard and let them help you with this process. You can set up a traditional IRA account now and it will be empty and waiting for the transfer. It might be recommended to establish a MM account to receive the funds. When the transfer is done, you can exchange from the MM account to whatever funds you want to have in your IRA account.

It might be simpler to move all of your 401k funds into a MM fund prior to the transfer.

The transfer can be done however your 401k allows. If they allow a custodian to custodian transfer, that might be easiest.

Best wishes with this transfer.
Jerry
"I was born with nothing and I have most of it left."

tony44
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Re: Time to transfer 401K to Vanguard - help please.

Post by tony44 » Sun Jun 08, 2014 12:53 pm

I JUST did this about a month ago...you can put the funds into MM account or into a fund....your choice. It is very simple and a Vanguard associate can walk you through the entire process. Give them a call and ask them what you posted here. Good luck!

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thursdaysd
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Re: Time to transfer 401K to Vanguard - help please.

Post by thursdaysd » Sun Jun 08, 2014 1:05 pm

I just did this too. I found the concierge rep at VG easy to work with. I already had a VG IRA, and I just told him which funds to put the money in based on which fund it had been in in my 401K (eg. SP500 to SP500) and he worked it out.

It turned out that Fidelity, the custodian for my 401K, would not send the money direct to VG, they sent me a check which I then sent to VG. The VG rep made the call to Fidelity and then conferenced me in. I was annoyed with Fidelity, because it meant that the money was out of the market for several days.

I moved some other things at the same time and I was overall impressed with the VG service, although aside from the 401K funds it took a bit longer than I expected.
Thursday's child has far to go

Calm Man
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Re: Time to transfer 401K to Vanguard - help please.

Post by Calm Man » Sun Jun 08, 2014 1:32 pm

thursdaysd wrote:I just did this too. I found the concierge rep at VG easy to work with. I already had a VG IRA, and I just told him which funds to put the money in based on which fund it had been in in my 401K (eg. SP500 to SP500) and he worked it out.

It turned out that Fidelity, the custodian for my 401K, would not send the money direct to VG, they sent me a check which I then sent to VG. The VG rep made the call to Fidelity and then conferenced me in. I was annoyed with Fidelity, because it meant that the money was out of the market for several days.

I moved some other things at the same time and I was overall impressed with the VG service, although aside from the 401K funds it took a bit longer than I expected.
I have learned now through 2 experiences that this is what custodians do with 401Ks. Not only that but you will get a 1099-R for the tax year that has to be accounted for when you file your income taxes.

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thursdaysd
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Re: Time to transfer 401K to Vanguard - help please.

Post by thursdaysd » Sun Jun 08, 2014 1:41 pm

Not only that but you will get a 1099-R for the tax year that has to be accounted for when you file your income taxes.
Errr, probably a stupid question, but how do I do that? (TIA)
Thursday's child has far to go

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cfs
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Re: Time to transfer 401K to Vanguard - help please.

Post by cfs » Sun Jun 08, 2014 1:58 pm

Testimonials.

Easy process. Received the check from my 401k on Monday. Sent to Vanguard on Monday afternoon via priority mail. Money invested in my Traditional IRA on Wednesday. Easy done with prior coordination with one of Vanguard's representatives. This is the third time we transfer a 401k to Vanguard, and the Vanguard team's batting average is 1000, 3 for 3 with no issues.

Thanks for reading.
~ Member of the Active Retired Force since 2014 ~

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Doom&Gloom
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Re: Time to transfer 401K to Vanguard - help please.

Post by Doom&Gloom » Sun Jun 08, 2014 2:17 pm

Another testimonial:

I recently moved three 457 accounts to a new Vanguard IRA. The VG rep set up a conference call with the custodian of the accounts and we arranged a direct transfer to VG. Completely painless. The 457 accounts were all liquidated and checks were mailed directly to VG.

The VG rep suggested that I consider moving them into a ST bond fund, but since I knew I would be allocating them as quickly as possible, I told her that I'd prefer transferring them into a MM fund so that's what we did.

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Duckie
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Re: Time to transfer 401K to Vanguard - help please.

Post by Duckie » Sun Jun 08, 2014 5:21 pm

thursdaysd wrote:
Not only that but you will get a 1099-R for the tax year that has to be accounted for when you file your income taxes.
Errr, probably a stupid question, but how do I do that? (TIA)
Per the instructions on pages 25/26, when you file your IRS Form 1040, on line 16a put the total amount distributed from your 401k plan. This amount should match the 1099-R. If you rolled all of it over to the IRA (and didn't convert any of it to a Roth IRA) then put 0 on line 16b and write "Rollover" next to line 16b. You won't pay any taxes but you have to account for the 1099-R otherwise the IRS will come back thinking you do owe taxes.

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thursdaysd
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Re: Time to transfer 401K to Vanguard - help please.

Post by thursdaysd » Sun Jun 08, 2014 5:23 pm

@Duckie - thanks. That sounds straightforward. I certainly rolled it all over!
Thursday's child has far to go

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ElJay
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Re: Time to transfer 401K to Vanguard - help please.

Post by ElJay » Sun Jun 08, 2014 5:40 pm

If we're doing testimonials, here's mine from a few months ago:

Roth 401k rollover from T. Rowe Price to Vanguard. The Roth 401k is a mix of Roth money and pretax money, the latter being matching funds and a previous rollover I had done.

I already had a Roth IRA and Traditional IRA set up at Vanguard.

I called up T. Rowe Price and provided them with the account and fund numbers for the Roth money and the pre-tax money. T. Rowe Price mailed two checks to Vanguard with the appropriate account numbers attached to each.

A few business days later, Vanguard deposited all of the money into my Roth IRA, and also decided to characterize some of my Roth money as a Roth conversion. I contacted Vanguard and they fully admitted that depositing my pre-tax money into my Roth was in error, but they claim the Roth conversion money was flagged that way due to documentation from T. Rowe Price. I then call up T. Rowe Price and ask them why they have characterized some of my Roth money as pre-tax; T. Rowe Price does some research and says that they didn't classify any of my Roth money as pre-tax and that Vanguard is in error.

I call back Vanguard again and make it to a level two support person. She successfully rolls back the erroneous transactions and then directs the money as I had originally intended. I am afraid to see my 1099-R for this year.

Austintatious
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Re: Time to transfer 401K to Vanguard - help please.

Post by Austintatious » Sun Jun 08, 2014 5:43 pm

DW did this a year and a half ago with her 401k. Her employer uses JPMorgan for the plan. We contacted Vanguard, and they arranged a conference call with JPMorgan and helped her through it all. JPMorgan liquidated the funds, prepared a check made payable to Vanguard for the benefit of DW, and sent it to us. We forwarded the check to Vanguard and the rest is history. Good luck!

placeholder
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Re: Time to transfer 401K to Vanguard - help please.

Post by placeholder » Mon Jun 09, 2014 12:22 am

Are you set on Vanguard because there are number of good custodians out there offering nice bonuses for rollovers (if you have a good amount to bring in) where you can buy Vanguard ETFs at low or no cost:
http://www.hustlermoneyblog.com/best-brokerage-bonuses/
I think the best is the TD Ameritrade right now but since the offer ends at the end of the month anyone interested should open the account and get it coded before then (you have another six months to fund it).

rakornacki1
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Re: Time to transfer 401K to Vanguard - help please.

Post by rakornacki1 » Mon Jun 09, 2014 6:15 am

If you're not yet working with someone specific at Vanguard, I would suggest that you ask for their 'Conciergie Service'. They are very efficient and professional in expediting your transfer. Good luck.

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