Broker 3rd degree over every retirement withdrawal?

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JoeTaxpayer
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Broker 3rd degree over every retirement withdrawal?

Post by JoeTaxpayer »

I will not name any company, this is a question about 'normal process' not meant to be a rant.

I (and wife) are retired. Until last year, our 401(k) was at Company A. To make it easier to take withdrawals for ongoing expenses, I'd go on line and make a cash transfer to my regular broker Company B IRA and then transfer every few months to my checking.

My former employer changed 401(k) custodians, and when I went to make the transfer last week with Company C, saw the transfer option wasn't there. To send money to an outside IRA or withdraw funds required a phone call. 3pm. I called. After a transfer, a disconnect, etc, I get a rep who started to ask questions. Fair enough. I am retired, I would like to withdraw next XX month's living expenses. No, I don't need advice, thank you, I retired 10 years ago and happy to lag the market by a fraction of a percent. He kept me on the phone past 4pm (between hold time and talking, the timer showed 45 minutes), so I missed the time to make the transaction. I asked him if I had an assigned rep, as I do with my Company B, he said 'no'. I then asked, so, if I made these transfers monthly, I'd need to call each time? "Yes". And I'd get a different rep each time? "Yes". Do you see how the first call, I kind of felt like you actually were helpful and asked questions that might keep people from making a mistake, but when the next rep answers the phone, I'd like the call to take a few minutes, tops? "Good point".

I asked again if there was any way to flag the account to not go into the question mode and sales pitch when I called. No. Funny thing, half of the conversation was as if I were trying to leave, an account transfer, vs a withdrawal of 1% to last the next quarter.

I will say, the old 401(k) custodian used Vanguard for its S&P index, and it was the institutional version that sported a .02% expense. The new company has its own offering at .03%. And I'm considering just calling it quits on the 401(k), and move both of our accounts to our IRAs. (And VOO has the same .03% expense)

Is what I went through normal? I've grown too used to the simplicity of on line transactions.
obgraham
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Re: Broker 3rd degree over every retirement withdrawal?

Post by obgraham »

Simple: move your 401k to an IRA and run it yourself.
Been doing that for 20 years, everything at Vanguard. Zero issues.
megabad
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Re: Broker 3rd degree over every retirement withdrawal?

Post by megabad »

I would say no it is not normal. My 401k provider practically begs people to do everything online. If you call, tier 1 phone support will basically just walk you through the website.
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CAsage
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Re: Broker 3rd degree over every retirement withdrawal?

Post by CAsage »

I would dump them for hostile and inappropriate customer service. Or, next time you call, refuse to answer any questions and just keep repeating your request. You don't need to engage.
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Nate79
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Nate79 »

I do not understand you you haven't rolled it over to an IRA. Like yesterday.
mw1739
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Re: Broker 3rd degree over every retirement withdrawal?

Post by mw1739 »

Assuming you don’t want to transfer the whole account, is it possible to “pull” it from your IRA custodian?
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Svensk Anga
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Svensk Anga »

Is a rollover IRA with the current 401k custodian an option? They might have fewer roadblocks for a transfer in-house.

Asset protection is likely better in the 401k, so I understand why you would want to keep the bulk of your funds there. Maybe larger transfers less frequently would work well enough.
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Brianmcg321
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Brianmcg321 »

Just roll it over, and make your transfers online. Easy peasy
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Watty
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Watty »

Roll it over to an IRA.

The best way to do this is to contact the new company and they will walk you through the process and handle contacting the old 401k company to transfer the funds directedly.

One advantage of this is that if you die then the old 401k may not have all the inherence rules set up in the plan documents so whoever inherits it could be limited by what the 401k plan documents does or does not say.
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Jack FFR1846 »

I never would have spent that much time on the phone. Remember that calls are recorded and when you tell them that you don't have time for their reindeer games and will therefor pull all your money out because YOU wasted my time, the supervisor will listen to the call. Maybe if enough people do this, they won't waste people's time.

So are you pulling the money out to go to Schwab, Fidelity or Vanguard?
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Clever_Username
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Clever_Username »

Unless you need protections specific to a 401(k), or you are planning to do a backdoor Roth and thus do not want to have pre-tax IRA assets, it sounds like the vendor offers no benefit over a rollover IRA. I'd roll it over to Vanguard if it were me in that situation you describe.
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coffeeblack
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Re: Broker 3rd degree over every retirement withdrawal?

Post by coffeeblack »

Can you move the entire 401K to someone else? Vanguard?
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baconavocado
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Re: Broker 3rd degree over every retirement withdrawal?

Post by baconavocado »

Like others have advised, seems like the easiest solution is to roll the 401K into your IRA. Before you do that, you might want to ask your IRA account holder how that process will work out because when I did it, the money remained uninvested for about a week while the funds were in transit. If that's the case with you, try to pick a calm period in the market, maybe in the middle of the month, definitely not at the end of a quarter, to do the transfer.
adamthesmythe
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Re: Broker 3rd degree over every retirement withdrawal?

Post by adamthesmythe »

Since you apparently get a different rep each time you call- I would call ONE more time to request an efficient setup for regular withdrawals.

If they are not willing to help (and quickly) contact your other broker and have them transfer your account.
Minority Opinion
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Minority Opinion »

One advantage of this is that if you die then the old 401k may not have all the inherence rules set up in the plan documents so whoever inherits it could be limited by what the 401k plan documents does or does not say.
This is a very good point you'll want to check. I have encountered many instances where plan documents and beneficiary designations don't survive a plan administrator/custodian change. You should double check that your primary and secondary beneficiary designations are still on your account.
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birdog
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Re: Broker 3rd degree over every retirement withdrawal?

Post by birdog »

Brianmcg321 wrote: Sat Jan 30, 2021 3:44 pm Just roll it over, and make your transfers online. Easy peasy
Exactly. I would have done this years ago. It also allows for a simpler portfolio with fewer accounts.
usagi
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Re: Broker 3rd degree over every retirement withdrawal?

Post by usagi »

File a complaint with the SEC and see if the company does not get an attitude adjustment.
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celia
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Re: Broker 3rd degree over every retirement withdrawal?

Post by celia »

There are some custodians, like Vanguard, where you can set up monthly or quarterly withdrawals to go to your checking account. Then you won't even have to call or log in to get your monthly living expenses. This might help you stay within your budget, too. Of course, you need to have calculated your budget expenses properly so you don't run out of money in your last few years.
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Stinky
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Stinky »

What horrible customer service you received!

Since you missed the trading deadline on Friday, it sounds like you'll need to wait until Monday to move THE WHOLE ACCOUNT to Vanguard. Put Company C behind you.
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dcabler
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Re: Broker 3rd degree over every retirement withdrawal?

Post by dcabler »

Interesting. I've never heard of somebody incrementally transferring from a 401K to their IRA while in retirement for spending purposes.

I'm pre-retirement and I don't care for my broker's offerings in my 401K. I'm also older than 59.5 and I transfer most of my 401K each year to my rollover IRA at my favorite broker. This definitely requires a phonecall but my receiving broker can also be on the line to smooth the transition. Once I do retire, I'll do the same as I've done when I've left any employer - it all gets rolled over in one shot to my other broker and I'm done.

As so many others have said, why don't you just transfer the whole enchilada once and be done with it?

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afan
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Re: Broker 3rd degree over every retirement withdrawal?

Post by afan »

Whether you get the same asset protection in a rollover IRA as in the original 401(k) depends on state law. You may have the same protection if you made the rollover.

When I moved retirement money from one vendor to another at my current employer, the source company called me to try to talk me out of it. Only accelerated my resolve to get away.

If you are concerned about being out of the market, you can schedule a series of transfers, so one is complete before the next one starts.
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galawdawg
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Re: Broker 3rd degree over every retirement withdrawal?

Post by galawdawg »

As others recommended, do a rollover of the full amount to an IRA at the brokerage you prefer (Vanguard, Schwab, Fidelity, E*TRADE, etc). I'd call them exactly zero more times. Done! :beer
vested1
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Re: Broker 3rd degree over every retirement withdrawal?

Post by vested1 »

On a positive note your former employer saved $ by going with the lowest bidder as custodian of your 401k, so at least someone came out ahead. :annoyed
bltn
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Re: Broker 3rd degree over every retirement withdrawal?

Post by bltn »

One more recommendation for rolling the entire 401k into the IRA at Vanguard. Then do transfers into your checking account online, w/o phone calls. Have Vanguard do it for you.
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Re: Broker 3rd degree over every retirement withdrawal?

Post by angelescrest »

Noting all the recommendations to roll it over to an IRA, just wondering if the legal protections offered by a 401k are not worth considering? I recognize it varies state to state, but it’s something I’ve always had in the back of my mind.
fourwheelcycle
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Re: Broker 3rd degree over every retirement withdrawal?

Post by fourwheelcycle »

We moved all or our employer-based retirement accounts out of our employers' custodians as soon as we could after retiring. Prior to our employers' negotiation with their custodians to offer Vanguard Institutional shares, we moved our retirement funds in part to save ER expense, but we did it mostly to get all of our funds where we could manage them online, in the same mutual funds we use for our taxable savings. Most recently, we ended up moving from Vanguard Institutional shares to Vanguard Admiral shares, but we still moved, even though we lost some ER points and we now have almost all of our savings at one broker.
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galawdawg
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Re: Broker 3rd degree over every retirement withdrawal?

Post by galawdawg »

angelescrest wrote: Sun Jan 31, 2021 10:01 am Noting all the recommendations to roll it over to an IRA, just wondering if the legal protections offered by a 401k are not worth considering? I recognize it varies state to state, but it’s something I’ve always had in the back of my mind.
As you noted, it depends upon the state. Any investor with substantial assets, even if many cannot be accessed by creditors, should consider having an umbrella policy. The cost averages in the neighborhood of $120/yr per million of coverage.
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midareff
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Re: Broker 3rd degree over every retirement withdrawal?

Post by midareff »

fourwheelcycle wrote: Sun Jan 31, 2021 10:03 am We moved all or our employer-based retirement accounts out of our employers' custodians as soon as we could after retiring. Prior to our employers' negotiation with their custodians to offer Vanguard Institutional shares, we moved our retirement funds in part to save ER expense, but we did it mostly to get all of our funds where we could manage them online, in the same mutual funds we use for our taxable savings. Most recently, we ended up moving from Vanguard Institutional shares to Vanguard Admiral shares, but we still moved, even though we lost some ER points and we now have almost all of our savings at one broker.
Exactly. There is no need for superfluous middle men between you and your money. It's your money to do with as you chose with no reasons or excuses to anyone.
angelescrest
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Re: Broker 3rd degree over every retirement withdrawal?

Post by angelescrest »

galawdawg wrote: Sun Jan 31, 2021 10:10 am
angelescrest wrote: Sun Jan 31, 2021 10:01 am Noting all the recommendations to roll it over to an IRA, just wondering if the legal protections offered by a 401k are not worth considering? I recognize it varies state to state, but it’s something I’ve always had in the back of my mind.
As you noted, it depends upon the state. Any investor with substantial assets, even if many cannot be accessed by creditors, should consider having an umbrella policy. The cost averages in the neighborhood of $120/yr per million of coverage.
(Not trying to derail the OP, as I think this is relevant here)

From a legal perspective, does having a significant umbrella policy essentially cover everything that the 401k protections allow, negating the need to keep it there? (I have one)
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galawdawg
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Re: Broker 3rd degree over every retirement withdrawal?

Post by galawdawg »

angelescrest wrote: Sun Jan 31, 2021 10:12 am
galawdawg wrote: Sun Jan 31, 2021 10:10 am
angelescrest wrote: Sun Jan 31, 2021 10:01 am Noting all the recommendations to roll it over to an IRA, just wondering if the legal protections offered by a 401k are not worth considering? I recognize it varies state to state, but it’s something I’ve always had in the back of my mind.
As you noted, it depends upon the state. Any investor with substantial assets, even if many cannot be accessed by creditors, should consider having an umbrella policy. The cost averages in the neighborhood of $120/yr per million of coverage.
(Not trying to derail the OP, as I think this is relevant here)

From a legal perspective, does having a significant umbrella policy essentially cover everything that the 401k protections allow, negating the need to keep it there? (I have one)
An umbrella policy doesn't protect your assets from creditors as a result of poor financial decisions, but it does provide protection from financially ruinous consequences of an event where you might have significant legal liability (the most common would be a motor vehicle collision resulting in loss of life or life-impairing disabilities to another person). In addition to the coverage, the insurance company pays for the legal defense and with $1 million or more in coverage, that defense is generally vigorous.

When it comes to a decision of whether to roll-over a 401k to an IRA, I personally don't believe asset protection should be a significant consideration. That is letting the tail wag the dog.
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Re: Broker 3rd degree over every retirement withdrawal?

Post by afan »

Umbrella covers only a subset of liability exposure. Does not cover debts you owe for example.

Umbrella is worth having but in no way is it a substitute for 401(k) protection. Not even close.

Check with a lawyer about the protection you get if you rollover. Apparently, in my state, the protection follows that of the source. If it came from a 401(k), then it keeps that protection once in a rollover IRA. But you need to know the treatment in your state.

Asset protection is critical to me, so I would not make this move without checking with a lawyer. Those who don't care about asset protection presumably don't need umbrella coverage either.
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beernutz
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Re: Broker 3rd degree over every retirement withdrawal?

Post by beernutz »

JoeTaxpayer wrote: Sat Jan 30, 2021 2:16 pm I will not name any company, this is a question about 'normal process' not meant to be a rant.

I (and wife) are retired. Until last year, our 401(k) was at Company A. To make it easier to take withdrawals for ongoing expenses, I'd go on line and make a cash transfer to my regular broker Company B IRA and then transfer every few months to my checking.

My former employer changed 401(k) custodians, and when I went to make the transfer last week with Company C, saw the transfer option wasn't there. To send money to an outside IRA or withdraw funds required a phone call. 3pm. I called. After a transfer, a disconnect, etc, I get a rep who started to ask questions. Fair enough. I am retired, I would like to withdraw next XX month's living expenses. No, I don't need advice, thank you, I retired 10 years ago and happy to lag the market by a fraction of a percent. He kept me on the phone past 4pm (between hold time and talking, the timer showed 45 minutes), so I missed the time to make the transaction. I asked him if I had an assigned rep, as I do with my Company B, he said 'no'. I then asked, so, if I made these transfers monthly, I'd need to call each time? "Yes". And I'd get a different rep each time? "Yes". Do you see how the first call, I kind of felt like you actually were helpful and asked questions that might keep people from making a mistake, but when the next rep answers the phone, I'd like the call to take a few minutes, tops? "Good point".

I asked again if there was any way to flag the account to not go into the question mode and sales pitch when I called. No. Funny thing, half of the conversation was as if I were trying to leave, an account transfer, vs a withdrawal of 1% to last the next quarter.

I will say, the old 401(k) custodian used Vanguard for its S&P index, and it was the institutional version that sported a .02% expense. The new company has its own offering at .03%. And I'm considering just calling it quits on the 401(k), and move both of our accounts to our IRAs. (And VOO has the same .03% expense)

Is what I went through normal? I've grown too used to the simplicity of on line transactions.
I understand not naming any company except for company C. Why protect their reputation?

Perhaps another Boglehead has dealt with them previously and has found a way through their phone labyrinth.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. --Will Rogers
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galawdawg
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Re: Broker 3rd degree over every retirement withdrawal?

Post by galawdawg »

afan wrote: Sun Jan 31, 2021 10:25 am Umbrella covers only a subset of liability exposure. Does not cover debts you owe for example.

Umbrella is worth having but in no way is it a substitute for 401(k) protection. Not even close.

Check with a lawyer about the protection you get if you rollover. Apparently, in my state, the protection follows that of the source. If it came from a 401(k), then it keeps that protection once in a rollover IRA. But you need to know the treatment in your state.

Asset protection is critical to me, so I would not make this move without checking with a lawyer. Those who don't care about asset protection presumably don't need umbrella coverage either.
I'm just curious what type of 401k asset protection would the average Boglehead be concerned with that isn't already addressed by making wise decisions, including having appropriate and adequate insurance coverage?
Topic Author
JoeTaxpayer
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Re: Broker 3rd degree over every retirement withdrawal?

Post by JoeTaxpayer »

Thank you all.

Not naming names because I am a moderator elsewhere, and am trained to edit out names when the post is otherwise a rant. Which is how I felt as I shared the details.

401(k) does offer a bit better asset protection, which hopefully I'd never need.

I suppose the other bit of why keep the 401(k), and my wife just asked this as well, is that it somehow felt safer, logistically, to have separate accounts. If for whatever reason, one broker had an issue that made them freeze assets for a time, etc. (this is probably bordering on paranoia, but 2 different companies seemed reasonable)

We both have pretax IRA money and at some point, if we started with Roth conversions, having the funds in the 401(k) would let us focus on the IRA conversion and lower the tax hit. (i.e. less money to pro-rate the tax on conversion).

When we retired, the .02% S&P fee (on the VIIIX, Vanguard's institutional offering) kept us with the original custodian. The transfers were painless, and I didn't give it a second thought.

Now, the question of why stop at the IRA, and not just take the withdrawals from the 401(k)? Good question - There's a mandatory 20% withholding on the 401(k) withdrawal. Which I feel is quite a negative. Consider, $100K withdrawal for a couple. Nothing but std deduction. Tax on $75200 is $8629. But the rule requires $20,000 to be withheld.

Again, I appreciate the feedback. I'm not one to start elevating these kinds of issues to SEC or whomever. The IRA Custodian I use, I've been with for nearly 40 years, I open my account while still in college. The 401(k) custodial has changed, many times. And, at some point, it will be time to move on.

I just appreciate the validation, the answer to "is this normal?" is just "No."
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Stinky
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Stinky »

JoeTaxpayer wrote: Sun Jan 31, 2021 11:16 am Not naming names because I am a moderator elsewhere, and am trained to edit out names when the post is otherwise a rant. Which is how I felt as I shared the details.
So you’ve gotten affirmation from the BH community that this behavior is not “normal”.

If you chose, one more thing that you could do is to pen short letters to the CEO, CFO, and head of HR at your former employer. Title it “Feedback from a Disappointed Retiree”. Tell them of the “third degree” that you got from the new 401k provider. Rant as much or as little as you’d like.

End the letter by saying - “I don’t know if my experience with the new provider is typical of the service they provide to plan participants. But if it is, you might want to look into this before you start getting more complaints from participants, including active employees.”

Sign the letters. Send them off. Take pride that you’ve done your little bit to improve the lives of current and former employees of the company.

Then take your money, move to Vanguard, and be well.
It's a GREAT day to be alive! - Travis Tritt
usagi
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Re: Broker 3rd degree over every retirement withdrawal?

Post by usagi »

JoeTaxpayer wrote: Sun Jan 31, 2021 11:16 am
...Again, I appreciate the feedback. I'm not one to start elevating these kinds of issues to SEC or whomever...

...I just appreciate the validation, the answer to "is this normal?" is just "No."
Re, the above and my comment in the SEC. It seems like this company is empowering its people to use bullying tactics, that while you may presently be immune to, other, more senior individuals may not be. Many in the financial industry coerce the elderly and pray on people's ignorance and weakness, that is why I suggested attempting to remediate the problem.

I 'll reiterate the point that has been made about liability and bankruptcy protection, it is well worth preserving. It is more or less a free benefit that is very valuable. This is, in large part, the reason I am rolling my traditional IRAs into my 401K plan. The other part is the one stop shop should make RMDs easy to calculate and handle.

There is also another aspect to this. In general, most 401K plans have improved over time, especially with activist employees who lobby for improvement. Moreover precious features you plan does not currently have, it may have in the future, either through government mandate or movement in the industry. One such feature is stable-value funds, something that you do not find outside of retirement plans but extremely valuable. The industry clearly seems to be moving toward partial annuitization of retirement plans, and many offer SPIA on very favorable terms, with modest fees. In my plan, for example, the rate for funds is actually lower than in the general market place, this is true for index funds and actively managed funds. And many plans offer free robot advisors and actual financial planners. That may be coming to your plan in the future in terms of the general effect of the marketplace or by congressional action. But once you area out of the plan, all of that is moot.

Cheers.
usagi
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Re: Broker 3rd degree over every retirement withdrawal?

Post by usagi »

JoeTaxpayer wrote: Sun Jan 31, 2021 11:16 am
...Again, I appreciate the feedback. I'm not one to start elevating these kinds of issues to SEC or whomever...

...I just appreciate the validation, the answer to "is this normal?" is just "No."
Re, the above and my comment in the SEC. It seems like this company is empowering its people to use bullying tactics, that while you may presently be immune to, other, more senior individuals may not be. Many in the financial industry coerce the elderly and pray on people's ignorance and weakness, that is why I suggested attempting to remediate the problem.

I 'll reiterate the point that has been made about liability and bankruptcy protection, it is well worth preserving. It is more or less a free benefit that is very valuable. This is, in large part, the reason I am rolling my traditional IRAs into my 401K plan. The other part is the one stop shop should make RMDs easy to calculate and handle.

There is also another aspect to this. In general, most 401K plans have improved over time, especially with activist employees who lobby for improvement. Moreover precious features you plan does not currently have, it may have in the future, either through government mandate or movement in the industry. One such feature is stable-value funds, something that you do not find outside of retirement plans but extremely valuable. The industry clearly seems to be moving toward partial annuitization of retirement plans, and many offer SPIA on very favorable terms, with modest fees. In my plan, for example, the rate for funds is actually lower than in the general market place, this is true for index funds and actively managed funds. And many plans offer free robot advisors and actual financial planners. That may be coming to your plan in the future in terms of the general effect of the marketplace or by congressional action. But once you area out of the plan, all of that is moot.

Cheers.
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BrandonBogle
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Re: Broker 3rd degree over every retirement withdrawal?

Post by BrandonBogle »

Since others have covered well rolling over to an IRA for conscience and conversely asset protection and pro-rata Roth conversions, I’ll focus on another aspect in your decision-making.

My employer just switched servicers for our 401k too. So far, I’m not impressed and miss the old servicer, but that could be the usual aversion to change humans experience. Also, I’m not retired, so my perspective on what I like/want from them is likely different than yours.

That all said, have you considered that some of this strong-arm tactics might be related to the 401k having just moved over? Perhaps the servicer is being “extra careful” so folks don’t make drastic changes to their accounts (potentially catastrophic), until the dust settles a bit? It doesn’t sound like this is the case, but I thought it might be something to thing about.
mhalley
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Re: Broker 3rd degree over every retirement withdrawal?

Post by mhalley »

I have accounts at all of the “big 3” brokerages as I feel more comfortable that way. So I suggest rolling the 401k to a different brokerage than your current ira.
GrowthSeeker
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Re: Broker 3rd degree over every retirement withdrawal?

Post by GrowthSeeker »

The 401k provider, by its policy, is encouraging you to take your business elsewhere.
I had several other points, but they have already been made, but here's a few more.

Regarding avoidance of pro-rata rule issues with Roth conversions, you could go ahead and roll all IRA pre-tax dollars into the 401k, then Roth convert all the remaining post tax IRA dollars and then never have a pro-rata worry again. Once that is completed you could move the 401k to a rollover IRA at Schwab, Fidelity, Vanguard or wherever. Or eventually to two brokerages to avoid all eggs being in one basket.

A friend told me that his IRA (Fidelity?) sends automated periodic RMD withdrawals to his bank, and it takes proportional amounts from each fund in his account - but I think it only works for mutual funds, not ETFs. There may be different RMD features at different institutions.
Just because you're paranoid doesn't mean they're NOT out to get you.
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BrandonBogle
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Re: Broker 3rd degree over every retirement withdrawal?

Post by BrandonBogle »

GrowthSeeker wrote: Sun Jan 31, 2021 5:51 pm Regarding avoidance of pro-rata rule issues with Roth conversions, you could go ahead and roll all IRA pre-tax dollars into the 401k, then Roth convert all the remaining post tax IRA dollars and then never have a pro-rata worry again.
Just a note to keep in mind this may not necessarily be an option. My prior employer’s 401k at Vanguard and my current employer’s 401k only allow roll-ins for active, in-service employees. So if I want to roll funds over to the older 401k at Vanguard to use their institutional funds or stable value funds, I’m out of luck unless I get rehired for a few months (and I never want to work that job ever again).
ssel
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Re: Broker 3rd degree over every retirement withdrawal?

Post by ssel »

When the agent asks the first question not directly relevant to your transfer request, politely and pleasantly say: "I do not wish to discuss that. Please just make the transfer." If they ask another question, repeat the same words verbatim. If they persist you'd have grounds to become less polite, but I can't imagine that happening once you've made your preference clear.
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JoeTaxpayer
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Re: Broker 3rd degree over every retirement withdrawal?

Post by JoeTaxpayer »

BrandonBogle wrote: Sun Jan 31, 2021 5:03 pm That all said, have you considered that some of this strong-arm tactics might be related to the 401k having just moved over? Perhaps the servicer is being “extra careful” so folks don’t make drastic changes to their accounts (potentially catastrophic), until the dust settles a bit? It doesn’t sound like this is the case, but I thought it might be something to thing about.
Yes. I tend to be polite to people on the phone, and as he asked his series of questions I was considering a few things. Whether the question was of use to me or to another customer and not just a way of preserving their assets. As I talked about how I had things set up (i.e. the 'good' broker IRA, etc) he kept reverting to 'sales' mode. Yes, I could have done as others suggested attempting to cut the conversation short, but, in hindsight, I'm better off for not doing that.

Since originally posting, I see that I'm able to transfer for 401(k) to IRA at same broker. My wife has a small IRA there, that we never consolidated. We initiated a transfer request Friday for execution today. And our regular broker has paperwork to pull funds from other broker IRA. Since this transaction is very infrequent, a quick visit to get the form notarized is no big deal.

What I missed saying was "I've been with my broker for nearly 40 years. I know you are a great broker, too, but my company changes 401(k) custodians every 3-4 years, and setting up multiple account with you as well is going in the wrong direction."

Unrelated - My old employer changed medical insurance as well, and I'm on the phone every month as their system is a mess as we get booted off coverage because of a file-transfer issue. That's why I'm not writing to anyone at the company to comment on the 401(k). I am not adding another crusade to my list of to-do's. (The medical is over in 3 months when my wife turns 65, moves to medicare, and I go on a new plan as single adult.)
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Stinky
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Stinky »

JoeTaxpayer wrote: Mon Feb 01, 2021 8:09 am
Unrelated - My old employer changed medical insurance as well, and I'm on the phone every month as their system is a mess as we get booted off coverage because of a file-transfer issue. That's why I'm not writing to anyone at the company to comment on the 401(k). I am not adding another crusade to my list of to-do's. (The medical is over in 3 months when my wife turns 65, moves to medicare, and I go on a new plan as single adult.)
I agree that dealing with your medical mess is more pressing than dealing with 401(k) issue. First things first!

Aren't you glad that you aren't employed by this company any more? If both medical and 401(k) plans are messed up, who knows what else is going on?
It's a GREAT day to be alive! - Travis Tritt
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teen persuasion
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Re: Broker 3rd degree over every retirement withdrawal?

Post by teen persuasion »

BrandonBogle wrote: Sun Jan 31, 2021 5:03 pm Since others have covered well rolling over to an IRA for conscience and conversely asset protection and pro-rata Roth conversions, I’ll focus on another aspect in your decision-making.

My employer just switched servicers for our 401k too. So far, I’m not impressed and miss the old servicer, but that could be the usual aversion to change humans experience. Also, I’m not retired, so my perspective on what I like/want from them is likely different than yours.

That all said, have you considered that some of this strong-arm tactics might be related to the 401k having just moved over? Perhaps the servicer is being “extra careful” so folks don’t make drastic changes to their accounts (potentially catastrophic), until the dust settles a bit? It doesn’t sound like this is the case, but I thought it might be something to thing about.
With an employer (current or former) calling the shots on who services your 401k, you need to be constantly on alert to changes that might be made, possibly over and over. Rolling it to the IRA at the servicer of your choice puts you in the driver's seat instead of just along for the ride.

DH had left funds in a former employer's 401k. It kept getting moved every few years. We were ready to finally roll it over to a tIRA at Vanguard when we received notice that it was moving yet again. Unfortunately, we couldn't get the process started before the blackout period began. So we waited, and as soon as the blackout was lifted we jumped. Looking at the new statement, suddenly a portion of DH's 401k was no longer vested (had been 100% vested) and couldn't be rolled out. An error had crept in during the transfer, and the new servicer had no way to fix it - that was the data they received. We had to contact the former employer, who had gone out of business (401k was held by a higher up company). DH contacted that higher up company and was extremely lucky to be talking with a former coworker who knew about the 100% vesting at the shutdown. If we hadn't been looking to rollover to tIRA at that moment, we likely would not have noticed the data corruption, and gotten it corrected. A few years later, another transfer, and it might have been unrecoverable.

Every transfer is an opportunity for errors. More frequent transfers increases the chances of errors.
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JoeTaxpayer
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Re: Broker 3rd degree over every retirement withdrawal?

Post by JoeTaxpayer »

An update to share - The 401(k) broker is Fidelity.
I did set up an IRA to keep the need for calls to a minimum. On transfering to the IRA, when I transfer, say $10,000, the system automatically chooses between investments in proportion. e.g. $7000 stock, $3000 (very short term) bond fund. I saw a link to "submit a question" which I did - asking if there a way to specify that the transfer come from a specific investment. That's not a difficult question. And "No" is a likely answer, maybe with the advice to initiate a rebalance to the desired percents. Still, I asked. 5 days later I got -
Thank you for your email. Please note your Employer Sponsored Account is not serviced via email. When you initiated your message, it was directed to the Fidelity Personal Investment group for private accounts such as IRAs or personal brokerage accounts. Based on your message it appears you have questions regarding your Employer Sponsored Account.

In addition, you may be able to have your question answered using our new Virtual Assistance Tool. This tool can be found on the Customer Service page of the NetBenefits web site.

Employer Sponsored Accounts with Fidelity, e.g. 401(k), 403(b), pensions, are serviced by phone at (800) xxx-xxxx. Representatives working with your plan are available Monday through Friday (except NYSE holidays), 8:30 a.m. to Midnight ET or according to the designated hours of operation for your plan. As call volumes have been higher than normal recently, you may experience long hold times when calling.

If you are not sure what to enter, please hold the line. The message will repeat as many as three times and your call will be transferred to a Participant Services Representative. You may be asked to verify some personal information for the protection of your account.

Lastly, I would like to thank you for your patience while waiting for a response to your message. Thank you for the opportunity to explain. Have a great day!
The longest non-answer I've seen in a long time. Is this what has become of customer service?

I preferred to avoid naming names, but. A neighbor died a few months ago, and his wife wanted to ask my general advice. He had a similar situation, a 401(k) with Fidelity and she went through a similar experience. A new widow with a few procedural (not 'advice') questions, and each time she told me the rep just went into defense mode as if he was protecting his own funds. I told her to be done with them as quickly as the paperwork would allow.

As others have warned, I need to be careful of the dead time between a transfer. Planning to buy my index at Schwab with all the liquid cash I have there, and initiate a transfer to Fidelity IRA that would sell exactly that amount from their S&P fund, then transfer that directly as cash. It will take about 3 cycles. But I'm looking forward to being done with this. Funny, I used to be very patient. A 4-5 day email answer that actually had an answer would have been fine. I've never had such a request be urgent. When my MIL passes away and I needed paperwork to update her trust, my Schwab guy emailed me all the docs, with a good set of instructions, and an apology that it was 2 business days later.
ItzaHoot
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Re: Broker 3rd degree over every retirement withdrawal?

Post by ItzaHoot »

Fees are excessive with current custodian. You should not have 20% with held for taxes if you do a custodian to custodian transfer to a ROLLOVER IRA. Not a regular IRA. Fidelity has very low fees and good options. We have everything (rollover IRA, Roth, moneymarket/checking) and everything is easy-peasy.
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JoeTaxpayer
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Re: Broker 3rd degree over every retirement withdrawal?

Post by JoeTaxpayer »

ItzaHoot wrote: Sat Apr 10, 2021 9:10 am Fees are excessive with current custodian. You should not have 20% with held for taxes if you do a custodian to custodian transfer to a ROLLOVER IRA. Not a regular IRA. Fidelity has very low fees and good options. We have everything (rollover IRA, Roth, moneymarket/checking) and everything is easy-peasy.
The 20% is standard, required for 401(k) withdrawals. This all started for the fact that I was transferring to an IRA to control tax withholdings. Apparently, as I discovered, Fidelity service for their 401(k) clients is vastly different from their IRA service.
Lexx
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Re: Broker 3rd degree over every retirement withdrawal?

Post by Lexx »

I see no reason to be polite when the rep is clearly trying to harangue you with a sales pitch. Whenever I'm faced with such a situation my reply is "Stop now. I do NOT want to hear your sales pitch. I don't have time for that. Get this done or transfer me to your supervisor." Schwab's personal adviser called me once and tried to sell me. I told him if he calls back again, I will move my money out of Schwab and tell the company he was the reason. I hate unsolicited sales pitches.
JediMisty
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Re: Broker 3rd degree over every retirement withdrawal?

Post by JediMisty »

Lexx wrote: Sat Apr 10, 2021 3:55 pm I see no reason to be polite when the rep is clearly trying to harangue you with a sales pitch. Whenever I'm faced with such a situation my reply is "Stop now. I do NOT want to hear your sales pitch. I don't have time for that. Get this done or transfer me to your supervisor." Schwab's personal adviser called me once and tried to sell me. I told him if he calls back again, I will move my money out of Schwab and tell the company he was the reason. I hate unsolicited sales pitches.
I agree completely. And no matter how politely I say this, folks accuse me of "being rude". Got pitched closing out my gym membership. The woman first tried to talk me into staying, then claimed she didn't know how and got her manager. When he tried it, I said, "She already tried that on me. I'm done." Big surprise, it wasn't done correctly and required a phone call to correct. :oops:
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