Vanguard 401k to IRA in-kind success - When can we upgrade/consolidate to brokerage acct.?

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oslocal
Posts: 109
Joined: Sat May 21, 2016 5:30 pm

Vanguard 401k to IRA in-kind success - When can we upgrade/consolidate to brokerage acct.?

Post by oslocal » Wed Feb 06, 2019 4:46 pm

My wife recently completed an in-kind rollover from a Vanguard administered 401(k) with both regular/pre-tax and roth money in it - additionally some of the regular/pre-tax money was inside a VBO (self-directed vanguard brokerage option).

It was a somewhat confusing process in that they understood we wanted the money to remain invested and ideally rolled into her existing vanguard traditional and roth IRAs. We were informed that due to technical limitations, this was not possible, so they opened a Vanguard (non brokerage) IRA and Roth IRA for the money to go into - however the money that was in the VBO actually did transfer in-kind to the existing brokerage IRA account.

Here's how it worked:
VBO Assets (only pre-tax was allowed in this plan): Proper in-kind transfer into Traditional IRA Brokerage Account
Pre-tax money: Rolled into equivalent admiral share class versions in a new Rollover Traditional IRA Account (with multiple funds)
Roth money: Rolled into equivalent admiral share class versions in a new Roth IRA Account (with multiple funds)

We would like to consolidate these accounts or "upgrade" to brokerage, however this is currently not possible since it says there is a "transfer in progress". Do anyone know how long until this flag is removed? Or do we need to call?

I will say that we are very happy that this was possible rather than having to liquidate all the securities and transfer them out of the brokerage window, and then doing a cash rollover, however if we were to do it again, we would have moved all the Non-Roth assets into the VBO first before the rollover.

Alan S.
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Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: Vanguard 401k to IRA in-kind success - When can we upgrade/consolidate to brokerage acct.?

Post by Alan S. » Wed Feb 06, 2019 5:20 pm

I thought VG wanted all new IRA accounts to be in the brokerage platform, so why would they open mutual fund IRAs instead of brokerage IRA accounts to receive these direct rollovers? Particularly since the VBO was already in a brokerage account.

Of course, this can be fixed by doing non reportable direct transfers of this IRA money into brokerage IRA accounts.

The "transfer in progress" hold probably relates to "trailing dividends" or similar amounts that were not available in the initial direct rollovers, but would normally automatically follow the original direct rollovers into those same IRAs. VG should be able to further clarify this question.

Topic Author
oslocal
Posts: 109
Joined: Sat May 21, 2016 5:30 pm

Re: Vanguard 401k to IRA in-kind success - When can we upgrade/consolidate to brokerage acct.?

Post by oslocal » Mon Feb 11, 2019 7:08 pm

Alan S. wrote:
Wed Feb 06, 2019 5:20 pm
I thought VG wanted all new IRA accounts to be in the brokerage platform, so why would they open mutual fund IRAs instead of brokerage IRA accounts to receive these direct rollovers? Particularly since the VBO was already in a brokerage account.

Of course, this can be fixed by doing non reportable direct transfers of this IRA money into brokerage IRA accounts.

The "transfer in progress" hold probably relates to "trailing dividends" or similar amounts that were not available in the initial direct rollovers, but would normally automatically follow the original direct rollovers into those same IRAs. VG should be able to further clarify this question.
Yes I was confused why they would open mutual fund IRAs given all I've heard about them closing those.
The VBO assets did actually go into the brokerage account - but those were the only assets that did.

We were able to call and have them remove the "transfer in progress" flag which allowed the upgrade and consolidation. It's supposed to take 1 day to combine them.

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