Bummed about 401k

[FiguringItOut]

Just had to reduce my 401k contributions from $750/paycheck to $250/paycheck.  I'm so upset, but I'm running about $600/month short and I have no choice.  I'm not comfortable dipping into my EF for this.

When things improve, I'll bump it up to whatever it needs to be to max for the year, but for now I'm missing on the market boom that's going on.

(Wishing ex finds a job soon and starts paying child support again).

I'm just venting here. 


PS:  I going to tack on a question here at the end in case anybody reads it.
I have a small 401K account, around $17-18K from previous job.  I contacted them about rolling it into my Rollover IRA at Vanguard.  They said from the time I submit the required form it will take about 4 weeks to do.  Is this normal?  What happens during those 4 weeks?  Is my money not sitting in the market at all and hanging somewhere in limbo?  Not here and not there and not working for me?  Is 4 weeks even normal amount of time for this?  Seems like it should be done with a click of mouth plus couple days for the bureaucracy.  In line of my current 401K situation, I think I'll leave it be for now.

[Dicey]

The secret of success is to buy low, sell high. One could reasonably argue that this is an excellent time to watch your existing account balances grow, but not a good time to be dumping new money into the market. It's very plausible that the market will settle down, hopefully right at the time you are able to crank up your contribution again.

You don't say why you're running short. Can you reduce your spending elsewhere to make that cutback less drastic?

[FiguringItOut]

The secret of success is to buy low, sell high. One could reasonably argue that this is an excellent time to watch your existing account balances grow, but not a good time to be dumping new money into the market. It's very plausible that the market will settle down, hopefully right at the time you are able to crank up your contribution again.

You don't say why you're running short. Can you reduce your spending elsewhere to make that cutback less drastic?

I suppose this is true.  Definitely a positive way to look at things.

Running short because not getting child support right now as ex lost his job 2 months ago.

[rtrnow]

PS:  I going to tack on a question here at the end in case anybody reads it.
I have a small 401K account, around $17-18K from previous job.  I contacted them about rolling it into my Rollover IRA at Vanguard.  They said from the time I submit the required form it will take about 4 weeks to do.  Is this normal?  What happens during those 4 weeks?  Is my money not sitting in the market at all and hanging somewhere in limbo?  Not here and not there and not working for me?  Is 4 weeks even normal amount of time for this?  Seems like it should be done with a click of mouth plus couple days for the bureaucracy.  In line of my current 401K situation, I think I'll leave it be for now.

It's not totally unusual depending on the company and their process. I recently rolled a company plan from Fidelity to Vanguard. Much to my surprise Fidelity will only do that by actually mailing me a check that I must then mail to Vanguard. It didn't take four weeks but it was something I expected to be accomplished faster and electronically (or at least b/t institutions and not through me).

[Greenstache]

Rollovers are generally a slow process, because none of the third party administrating entities want you to take money out of your accounts with them.  That said, the money should be invested (on one end or another) for most of, if not the entire time.  The investments remain in your current account (actively participating in markets) for the initial week(s) while the paperwork is processed, and then should be allocated to your chosen investments almost, if not immediately, upon receipt by Vanguard.  To be sure there isn't any period where funds are converted to cash and missing out on market fluctuations, you can ask the current custodian for specifics on how they handle rollover funds.

[Erica]

It's not totally unusual depending on the company and their process. I recently rolled a company plan from Fidelity to Vanguard. Much to my surprise Fidelity will only do that by actually mailing me a check that I must then mail to Vanguard. It didn't take four weeks but it was something I expected to be accomplished faster and electronically (or at least b/t institutions and not through me).

We just had a 401k meeting. I swear he said that if you receive a check, you pay taxes on it because it is in your hand or there is a 20% charge. Something very bad to where you do not want to have access to a paper check. It needs to be done another way.

That is good to know about Fidelity but it may be illegal.

[Candace]

It's not totally unusual depending on the company and their process. I recently rolled a company plan from Fidelity to Vanguard. Much to my surprise Fidelity will only do that by actually mailing me a check that I must then mail to Vanguard. It didn't take four weeks but it was something I expected to be accomplished faster and electronically (or at least b/t institutions and not through me).

We just had a 401k meeting. I swear he said that if you receive a check, you pay taxes on it because it is in your hand or there is a 20% charge. Something very bad to where you do not want to have access to a paper check. It needs to be done another way.

That is good to know about Fidelity but it may be illegal.

The key is to have the check made out to the plan you're rolling into, not to yourself, and to deposit into that plan within 60 days. Then no tax is owed.

From https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions : (bold emphasis mine)
"Will taxes be withheld from my distribution?

    IRAs: An IRA distribution paid to you is subject to 10% withholding unless you elect out of withholding or choose to have a different amount withheld. You can avoid withholding taxes if you choose to do a trustee-to-trustee transfer to another IRA.

    Retirement plans: A retirement plan distribution paid to you is subject to mandatory withholding of 20%, even if you intend to roll it over later. Withholding does not apply if you roll over the amount directly to another retirement plan or to an IRA. A distribution sent to you in the form of a check payable to the receiving plan or IRA is not subject to withholding."

[Jakejake]

The key is to have the check made out to the plan you're rolling into, not to yourself, and to deposit into that plan within 60 days. Then no tax is owed.

Yep, the check needs to be made out like this: Vanguard Fiduciary Trust Company, Custodian of (yourname) IRA, and your Vanguard account number goes on the check too. Vanguard can talk you through it, and you'll likely have to talk to them anyway to get a copy of a Letter of Acceptance from them to forward to the company managing your 401k.

Once you start the process, call and nag the sending company regularly - my experience was that if they were missing anything, they would stall about letting me know for up to a week, unless I took the initiative to aggressively check in by phone to see how things were moving along. After rolling 5 accounts in the last 2 months, I feel fully qualified to begin a career in tele-stalking for a collections company.

[bada bing]

I've rolled a couple 401Ks over when I've left jobs in the past. I am a Schwab
customer and used their rollover specialist team both times. I assume that
other major discount brokerages have similar teams. The most painless way
to get it done is to contact the receiving brokerage (in my case Schwab), not
the current holder of the account. Both times I expected some hassle and delay,
but the process was easy. I stopped in a brick-n-mortar Schwab outlet, filled
out a rollover package and their "team" took over. I get the distinct impression
that Schwab's team is much faster and more certain than trying to shepherd the
rollover yourself and deliver a check to the receiving brokerage. My advice is to
let the new custodian handle it.

[Reynolds531]

Is child support flowing the opposite direction while your ex looks for a job? Assuming you're shared custody...

[MoonLiteNite]

I recently did a roll over from johnhanhock.
I requested check, took about a week to show up.
Then mailed it IRA folks, took about 1 week to get put in.

My old 401k would NOT do a wiretransfer, it HAD to be a check :/

[Erica]

It's not totally unusual depending on the company and their process. I recently rolled a company plan from Fidelity to Vanguard. Much to my surprise Fidelity will only do that by actually mailing me a check that I must then mail to Vanguard. It didn't take four weeks but it was something I expected to be accomplished faster and electronically (or at least b/t institutions and not through me).

We just had a 401k meeting. I swear he said that if you receive a check, you pay taxes on it because it is in your hand or there is a 20% charge. Something very bad to where you do not want to have access to a paper check. It needs to be done another way.

That is good to know about Fidelity but it may be illegal.

The key is to have the check made out to the plan you're rolling into, not to yourself, and to deposit into that plan within 60 days. Then no tax is owed.

From https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions : (bold emphasis mine)
"Will taxes be withheld from my distribution?

    IRAs: An IRA distribution paid to you is subject to 10% withholding unless you elect out of withholding or choose to have a different amount withheld. You can avoid withholding taxes if you choose to do a trustee-to-trustee transfer to another IRA.

    Retirement plans: A retirement plan distribution paid to you is subject to mandatory withholding of 20%, even if you intend to roll it over later. Withholding does not apply if you roll over the amount directly to another retirement plan or to an IRA. A distribution sent to you in the form of a check payable to the receiving plan or IRA is not subject to withholding."

Thank you Candace :)!

[FiguringItOut]

Is child support flowing the opposite direction while your ex looks for a job? Assuming you're shared custody...

We have shared legal custody but I have full physical custody.  So kids live with me and we alternate weekends and holidays.
No I don't pay him anything right now, so at least there's that.  But in addition to not getting  child support I'm also not getting reimbursed half of medical and some other kids expenses.  So it's been tough.