If your 401k rollover seems to be taking longer than you expected, one or more factors may be the culprit(s). Some of these factors can be avoided altogether, while others depend on things that might be partly or completely out of your control. So, what determines if your 401k rollover will take 1 week, 3 months, or somewhere in between?
Initiating My 401k Rollover
Cold feet have caused some investors to delay their 401k rollovers for weeks, months, and even years. Some eventually give up on the process altogether, even though initiating the 401k rollover is a relatively simple process.
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To get your 401k rollover wheels in motion, let your 401k plan administrator know ahead of time that you are planning to relocate your funds. This is also the best time to make sure you’re eligible to roll your 401k over, and speaking with the 401k manager will help you avoid any last-minute surprises.
401k Rollover Form Approval
Some 401k providers are more “particular” than others when it comes to approving 401k rollover paperwork. A 401k rollover usually means that the company is losing a client, and some companies are known to drag their feet when it comes to processing 401k rollover forms.
Some 401k providers request special forms from the retirement account custodian you’re moving the funds to. Some companies require forms with “wet ink,” meaning faxed or scanned/emailed copies of rollover paperwork are unacceptable. Knowing how both your old and new retirement account custodians want things done will help you speed up the 401k rollover process with as few headaches and time-consuming conference calls as possible.
Funding of 401k Rollover Account
Your former retirement account custodian will have to send your funds to your new retirement account custodian via a company check or a bank wire. Checks must be mailed, but usually clear within two business days since they are from recognized financial institutions. Bank wires usually allow funds to go from one account to another in less than one business day, but the cost for bank wires are often passed on to the client. Additionally, some retirement account providers insist on mailing checks and do not offer the bank wire option.
401k Rollover Investment Direction Execution
After your 401k has been rolled over to a self-directed IRA, it’s up to you to select your investment(s). When you inform your broker that you want to buy a certain stock or mutual fund, a Certificate of Deposit (CD), or precious metals, the broker will send you an invoice. Depending on the type of investment(s) you choose, your price(s) may or may not be guaranteed. Some IRA custodians require you and your broker to complete and submit an “investment direction form,” especially if you have never previously authorized the company or the broker to make an investment on your behalf. This is for the security of all parties involved, and the delay of the actual execution of the transaction is minimal.
There is no set time limit for 401k rollovers, and legislation meant to prevent delays has yet to be considered in Washington, D.C. To expedite your 401k rollover, remember the following 4 401k rollover tips:
- Take advantage of the free 401k rollover paperwork help provided by calling (800) 767-1423 or by visiting 401kRollover.com – this will lower the chance of incorrectly-filed out forms.
- Inform your 401k plan administrator ahead of time that you’re preparing to initiate a 401k rollover.
- If possible, ask to designate an Interested Party from your new IRA custodian. A designated Interested Party can call on your behalf to check the progress of the opening and funding of your new account, but cannot make investments without your approval.
- Be persistent, and try to remain professional at all times. If a company’s customer service department wasn’t up to par in the first place, who’s to say that yelling at the employee won’t get your 401k rollover application placed at the bottom of the pile? Since retirement accounts are tax-related, however, it might sometimes be necessary to contact your city or state attorney general to address the situation.
If you’d like help beginning the 401k rollover process, or if you’re currently dealing with a frustrating 401k rollover process, visit www.401kRollover.com or call (800) 767-1423 to see how you can flex your financial muscle and complete your 401k rollover in a timely manner.