Vanguard lost my 401K money!!

[Cutehumor]

I recently changed jobs. Well, I had my 401k money with vanguard changed over to my Roth IRA at Vanguard with rollover/conversion. the transaction went through on 11/4. I called last Saturday because their website shows that my 401k money was taken off, but it was not rolled over into my Roth IRA! It's like my money disappeared! I called during lunch today and I had to listen to a long recorded message about the economy, don't panic, and leave your money with them blah blah blah. Well, after talking to someone with the 401k people at vanguard, they said they could not locate where my money went! She spoke to the Roth IRA people while I was on hold, they have no record of any pending actions on my Roth IRA account. I'm so freakin mad, my blood was boiling. She said she was going to escalate my problem to the administrator to find out what happened.

 

[Saturn_Fan]

I'll be praying for your situation. Must be some kind of a glitch. It'll work out.

 

[Pablo]

Relax. I can assure you Vanguard didn't lose the money. A bit upsetting that they munched up a simple transaction. I haven't used Vanguard for years, but they'll make you whole.

Stuff does happen....

 

[Drew99GT]

Thank goodness your account isn't with a fly by night company. Vanguard is about the most legitimate financial services company in existence.

One thing: when you roll over a 401K to a Roth, you have to first roll the 401K to a rollover IRA, then convert that to a Roth and pay income tax on the money.

If you tried rolling your 401K directly into your Roth online (without doing the correct paperwork in consultation with someone), I bet the computer system had a hickup with your account.

 

[ToyotaNSaturn]

Cutehumor, I hope your situation gets rectified FAST.


Thank you for the head's up on what might be down the road for others in your situation.

 

[Cutehumor]

Originally Posted By: Drew99GT
Thank goodness your account isn't with a fly by night company. Vanguard is about the most legitimate financial services company in existence.

One thing: when you roll over a 401K to a Roth, you have to first roll the 401K to a rollover IRA, then convert that to a Roth and pay income tax on the money.

If you tried rolling your 401K directly into your Roth online (without doing the correct paperwork in consultation with someone), I bet the computer system had a hickup with your account.



I was rolling over my 401k using the paper form. It wouldn't let me do it online. I called customer service and they emailed me the paperwork. I had to give the paperwork to my old employer at human resources to send to vanguard. I figured either there was a ton of 401k cashouts with the awful stock market so my paperwork got lost in the shuffle somewhow OR I found the reason why the stock market is going down. I'm glad I caught this. I don't get paper statements. I've been ignoring my retirement accounts alot because I don't want to see how low my funds are getting. I should get an answer today. I gave them an updated cell/home number. If I don't get an answer today, I'll resume panic mode.

 

[PandaBear]

That happens to smith barney very often. They do not show your assets until you sign some sort of agreements. Your money will not be lost just like that.

 

[Cutehumor]

End of one business day since I called, I have not received a call about it.

 

[Pablo]

That is mildly disturbing. You need to tear somebody's head off and crawl down their throat!!

 

[XS650]

Originally Posted By: Cutehumor
End of one business day since I called, I have not received a call about it.


Hang in there, they won't lose it. Call them again and be firm but polite. The person answering the phone has some latitude in how he or she prioritizes your problem, you want them to understand your concern but not think you are a jerk. I'm not saying you acted like one but stress can do funny things to people.

Good luck on getting a resolution soon. I think you will.

 

[Cutehumor]

Originally Posted By: Pablo
That is mildly disturbing. You need to tear somebody's head off and crawl down their throat!!


I was on a recorded line the whole time too! So you would think they would be on the ball about it!

 

[Cutehumor]

I got this somewhat resolved. I got a recorded voice mail saying that they put the money in my IRA, it won't show on my account in 1-2 business days. The date will show 11/4 when the deposit occurred. no apologies, no explanation, just a "call us at the 1-800 customer service line for any questions"

 

[Drew99GT]

I've stopped looking at my IRA account since it's probably all gone............and that's not Fidelity's fault.

 

[Cutehumor]

Did I get screwed? the rollover is in my account now, but check this, it went through on 11/12 when my vanguard 500 stock was at $78.75, but they "processed" it on 11/4 when they received the paperwork at $93.25. that's almost $15 a share, I'm going to get taxed more on the higher value of stock. I wonder if they held it back to wait before the stock went even lower. Because I submitted this three weeks ago. It took a really long time to go through.

 

[dkryan]

Well, had they processed it when you wanted them to (11/4), it would have been priced at $93.25 per share, anyway.

I can't figure out (offhand) how Vanguard would come out ahead by holding YOUR shares for eight days before they processed your rollover. It's not like they could use the funds to "short" the S&P 500 index for a week.

 

[Al]

Originally Posted By: Cutehumor
I'm going to get taxed more on the higher value of stock.

Why would you pay tax on 401 K unless you are withdrawing it. And then you don't pay tax on Capital Gains.

 

[Drew99GT]

Originally Posted By: Al
Originally Posted By: Cutehumor
I'm going to get taxed more on the higher value of stock.

Why would you pay tax on 401 K unless you are withdrawing it. And then you don't pay tax on Capital Gains.


He's going from a 401K to a Roth IRA. Yea, the sucky thing about converting a 401K or a traditional IRA to a Roth IRA is you must pay taxes on the contributions AND the earnings (where as future contributions to a Roth, taxes will only be paid on contributions).

 

[dkryan]

Drew,

I don't quite understand what you meant.

You shouldn't be paying taxes on the contributions you made to your IRA IF you did not deduct those contributions when you made them. All earnings above your basis (contributions) would be taxed when you rolled over to a Roth.

Once you paid the taxes due on those earnings, any contributions and earnings are non-taxable within your Roth. You must be referring to using after-tax dollars (aka "take-home pay") to make those Roth contribuitons.

 

[Barkleymut]

in the future if any of you want to expidite this kind of transaction go to freeerisa.com and find out who the administrator of your plan is. Then ask them if they know what fiduciary responsibility is.

They will jump on your case so fast it will make your head spin. They will think you are about to sue them!

 

[Drew99GT]

Originally Posted By: dkryan
Drew,

I don't quite understand what you meant.

You shouldn't be paying taxes on the contributions you made to your IRA IF you did not deduct those contributions when you made them. All earnings above your basis (contributions) would be taxed when you rolled over to a Roth.

Once you paid the taxes due on those earnings, any contributions and earnings are non-taxable within your Roth. You must be referring to using after-tax dollars (aka "take-home pay") to make those Roth contribuitons.


This is a situation of a traditional 401K (meaning contributions are deductible in the year they are made) being converted to a Roth IRA (where in general contributions are taxed in the year of contribution - and all withdrawals during retirement are then tax free).

Ie, normally with any Roth account (whether it be an IRA or a 401K), contributions are taxed in the year of contribution, and withdrawn tax free during retirement. A traditional IRA/401K - contributions are not taxed in the year they are made, but are taxed when withdrawn during retirement.

If you convert a traditional account to a Roth account, you are taxed on both the contribution amount AND any earnings, which sucks. But then, future contributions to that Roth account are taxed in the year of contribution are taxed, but earnings are withdrawn tax free during retirement like an ordinary Roth account.

Essentially, you get penalized for converting a traditional account to a Roth account. In a perfect world, you'd only pay income tax on the contributions to a traditional account when you roll it over to a Roth, but that's not how the tax Gods made it.

Want simplified tax law now?

I do...