Paper check for 401k rollover

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SmileyFace
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Paper check for 401k rollover

Post by SmileyFace »

I recently changed jobs and am surprised to learn that to move money between 401ks at different institutions or between a 401k and rollover ira between institutions requires a paper check for the transfer. I came across this article from 2 years ago - talking to a scwab rep as well as an independent financial advisor seems still to be the process:
https://thefinancebuff.com/rollover-sch ... y-ira.html

There is something about a $500K+ check that makes me nervous - in this age of electronic transfers is there something Schwab isn't telling me? (Obviously they would rather keep my funds but I am considering the benifits of consolidation). Anyone recently move a large sum out of their 401k between schwab and fidelity?

UPDATE FOR ANYONE IN THE FUTURE THAT TRIPS ON THIS AND MIGHT BE INTERESTED: I initiated the rollover from Schwab - received the check via next-day UPS express. I then used Fidelity Mobile Deposit taking a picture of front/back check to deposit it into my IRA. Easy-peasy. Next day I had the money reinvested - was only out of market for 2 trading days. Note Schwab had a selection for Fidelity when I initiated the rollover from their website which filed out the check the way Fidelity specified automatically. I am glad I didn't have to deal with getting the paper check to Fidelity.
Last edited by SmileyFace on Wed Apr 07, 2021 2:32 pm, edited 1 time in total.
Longdog
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Re: Paper check for 401k rollover

Post by Longdog »

Years ago I needed a paper check to transfer funds from a Fidelity 401k for my previous employer to a Fidelity 401k for my next employer. Seemed strange at the time.
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dukeblue219
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Re: Paper check for 401k rollover

Post by dukeblue219 »

I moved a 401k from Schwab to a Fidelity IRA in 2018. I got a paper check as well. No issues. I think I mobile deposited via the Fidelity app but given the amount I can't be certain.

As long as Schwab knew it was a rollover and not a distribution you'll be fine. I'm pretty sure that's just a standard check (i.e. replaceable if lost).
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ClevrChico
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Re: Paper check for 401k rollover

Post by ClevrChico »

I've always had to use a paper check for rollovers, as that is what my 401k's required. There was no other option, even in 2020. My recommendation would be to use Fedex or USPS Express Mail to minimize time out of market.

If the 401k is with a major brokerage, you can possibly go directly from 401k > Rollover IRA at the same brokerage. Then transfer in kind from IRA > IRA electronically, with no paper check involved. It might take some phone calls to coordinate.
Last edited by ClevrChico on Mon Mar 29, 2021 6:58 am, edited 1 time in total.
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SmileyFace
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Re: Paper check for 401k rollover

Post by SmileyFace »

dukeblue219 wrote: Mon Mar 29, 2021 6:53 am I moved a 401k from Schwab to a Fidelity IRA in 2018. I got a paper check as well. No issues. I think I mobile deposited via the Fidelity app but given the amount I can't be certain.

As long as Schwab knew it was a rollover and not a distribution you'll be fine. I'm pretty sure that's just a standard check (i.e. replaceable if lost).
Good point/question on mobile deposit - will ask Fidelity about this (otherwise I am considering making a 30 minute drive to a Fidelity location to hand deliver the check for deposit - too many issues with mail these days).
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SmileyFace
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Re: Paper check for 401k rollover

Post by SmileyFace »

ClevrChico wrote: Mon Mar 29, 2021 6:56 am I've always had to use a paper check for rollovers, as that is what my 401k's required. There was no other option, even in 2020. My recommendation would be to use Fedex or USPS Express Mail to minimize time out of market.

If the 401k is with a major brokerage, you can probably go directly from 401k > Rollover IRA at the same brokerage. Then transfer in kind from IRA > IRA electronically, with no paper check involved. It might take some phone calls to coordinate.
Interesting idea I hadn't considered - thanks.
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Wiggums
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Re: Paper check for 401k rollover

Post by Wiggums »

I moved an IRA earlier this year and they issued a paper check to Vanguard (Trustee to Trustee). No issues.
backpacker61
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Re: Paper check for 401k rollover

Post by backpacker61 »

I transferred an old 401K (at AON Hewitt) into my new employer's 401K (Fidelity), and the transfer involved receiving a paper check made out to the new custodian on my behalf.

I just sent it in via certified mail. I was definitely nervous while the transfer was in flight, as the amount involved was more than my house is worth. No issues; and glad to have the funds consolidated into my new employer's plan.
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galawdawg
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Re: Paper check for 401k rollover

Post by galawdawg »

If you set up the rollover as trustee-trustee, your 401k provider will send the funds directly to your brokerage.

That is how we handled ours and once set up, it was hands off.
McDougal
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Re: Paper check for 401k rollover

Post by McDougal »

In July 2020 I rolled over my entire tIRA at Vanguard to my 401(k) at work, at Fidelity to enable backdoor Roth plans. It was also a paper check, that I mobile deposited to Fidelity on the app, just over $1MM. Did not lose a wink of sleep thru the whole time, but I was out of the market for around 6 days if I remember correctly.
scrabbler1
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Re: Paper check for 401k rollover

Post by scrabbler1 »

When I left my old company in late 2008, I took half of the 401k (company stock) as cash and the other half as a trustee-to-trustee rollover IRA. The cash was sent to my bank account needing a Medallion signature (an ongoing topic in another thread BTW). The IRA was a trustee-to-trustee check mailed to me. The following week, I went to my local Fidelity office to complete the rollover and to open a new mutual fund with most of the new cash. I wanted to handle these 2 large transactions (each over $200k) in person.
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Stinky
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Re: Paper check for 401k rollover

Post by Stinky »

SmileyFace wrote: Mon Mar 29, 2021 6:57 am
dukeblue219 wrote: Mon Mar 29, 2021 6:53 am I moved a 401k from Schwab to a Fidelity IRA in 2018. I got a paper check as well. No issues. I think I mobile deposited via the Fidelity app but given the amount I can't be certain.

As long as Schwab knew it was a rollover and not a distribution you'll be fine. I'm pretty sure that's just a standard check (i.e. replaceable if lost).
Good point/question on mobile deposit - will ask Fidelity about this (otherwise I am considering making a 30 minute drive to a Fidelity location to hand deliver the check for deposit - too many issues with mail these days).
I think driving to a Fidelity office is an excellent idea.
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SmileyFace
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Re: Paper check for 401k rollover

Post by SmileyFace »

Thanks for all the input!
intendi
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Re: Paper check for 401k rollover

Post by intendi »

I had a check get lost in the mail this past February. Kind of a pain and ended up being bad market timing wise (could have gone the other way of course).

If/when I need to move my 401k in the future I will seriously consider transferring to an IRA in house and then moving it electronically.
livesoft
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Re: Paper check for 401k rollover

Post by livesoft »

I got a larger 401(k) check out of my Fidelity 401(k) which appeared on my doorstep. I just picked it up and deposited in my new solo 401(k). Easy peasy. I was not nervous about it at all. What's up with that? If the check had gotten lost, then I am sure it would have simply been replaced.
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intendi
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Re: Paper check for 401k rollover

Post by intendi »

Mine was replaced promptly and the replacement check arrived in a reasonable amount of time. The problem was the canceled check also eventually made it and the recipient went ahead and processed it too despite redundant notification along the way. This prompted yet another round of phone calls and emails to get that backed out.

If not moving electronically, I would insist on an overnight option the next time.
Katietsu
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Re: Paper check for 401k rollover

Post by Katietsu »

I hate checks and rarely use them. But, I was under the impression that, legally, checks have the best consumer protections.
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oldcomputerguy
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Re: Paper check for 401k rollover

Post by oldcomputerguy »

SmileyFace wrote: Mon Mar 29, 2021 6:46 am There is something about a $500K+ check that makes me nervous - in this age of electronic transfers is there something Schwab isn't telling me? (Obviously they would rather keep my funds but I am considering the benifits of consolidation). Anyone recently move a large sum out of their 401k between schwab and fidelity?
My wife did this when she retired last year, ie rolled her Schwab 401k to her Fidelity IRA accounts. We also were not able to do an electronic roll-over, despite having been led to believe that we could. Schwab ended up sending her two paper checks (one for the pre-tax 401k amount and another one for the taxed Roth 401k funds). We had already downloaded and filled out the rollover forms from Fidelity so we took them and the checks to the local Fidelity office. To their credit, they handled them properly and quickly, the funds showed up in her accounts a day or two later.

Like you, I was nervous over having all her 401k money floating around out there as paper checks. But it ended well.
placeholder
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Re: Paper check for 401k rollover

Post by placeholder »

Megacorp requires checks sent to the address of record for rollovers as a security measure.
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SmileyFace
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Re: Paper check for 401k rollover

Post by SmileyFace »

Fidelity will allow a Mobile Deposit of the paper check which gives me some relief.
Instructions are here:
https://www.fidelity.com/retirement-ira ... -ira-steps

thanks all for the input.
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SmileyFace
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Re: Paper check for 401k rollover

Post by SmileyFace »

UPDATE FOR ANYONE IN THE FUTURE THAT TRIPS ON THIS AND MIGHT BE INTERESTED: I initiated the rollover from Schwab - received the check via next-day UPS express. I then used Fidelity Mobile Deposit taking a picture of front/back check to deposit it into my IRA. Easy-peasy. Next day I had the money reinvested - was only out of market for 2 trading days. Note Schwab had a selection for Fidelity when I initiated the rollover from their website which filed out the check the way Fidelity specified automatically. I am glad I didn't have to deal with getting the paper check to Fidelity.
GG1273
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Re: Paper check for 401k rollover

Post by GG1273 »

I had a 20-year old former job mid-5 figure pension payout done Nov of last year (during the election and vote by mail). I decided to spend the $40 for next day delivery via UPS with tracking and signature verification. The Vanguard mail-to site is in San Antonio. No issues and Vanguard deposited same day they received it.
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