I, like millions of Americans, had a couple old 401ks that were still hanging around from my old employers. I finally am getting around to rolling them over to a 401k. I would prefer to roll them directly into my Roth IRA, but apparently not many places allow you to do that. So I started my rollover from my 401k to my Traditional IRA account at Zecco.
(Sidebar: I am writing this article over a period of a week, so I apologize for flipping back and forth between past and present tense)
Today I am spending some time rolling my old 401k into my Roth IRA at Zecco. I would love it if they directly allowed me to roll it into a Roth, but oh well. So, I am told that I need to first “rollover your 401k in to an IRA, and then convert that IRA to a Roth.”
The Account Opening Process At Zecco
I have actually had an account with Zecco for a couple years now, I just haven’t done anything with it. For those of you who aren’t aware, Zecco is an online broker that offers $4.50 trades if you have less than $25,000 invested and 10 free trades/month if you have more than $25,000 – not a bad deal.
So I started the process by opening a new account for my Rollover IRA account (my other account there was a Roth IRA). After doing this I had to wait about 30 minutes before my account was approved.
Then I began to fill out their ACAT form. This is basically a form that gives the instructions to transfer the assets.
Next I called my old 401k provider and had about a 5 minute phone call with them providing the account number of my new IRA account, the address of Zecco (because that is where the check is going) and that was about it.
I had shares of the old company stock that I decided to transfer over instead of liquidating. And I also had a little invested in a 401k there – which the benefits rep said they could just be distributed to me without taxes or penalty – so I will just invest them in my Roth IRA when I receive the funds.
Pretty simple
Really that was about all that I had to do to get the ball rolling. I had always been intimidated by the 401k rollover process, but it was actually pretty easy for me.
Below are the specific instructions that Zecco has listed when rolling over a 401k to an IRA.
- Open a Zecco Trading Rollover IRA online. Don’t forget to mail the required documents after completion of the online application form (see the instructions at the confirmation page on the online application form).
- Contact your former employer’s Plan Administrator to request a direct rollover of your plan assets.
- Complete any distribution forms required by your former employer or Plan Administrator.
- Instruct the Plan Administrator to issue a distribution check made payable to: Penson Financial Services (the clearing firm for Zecco Trading financial transactions). The check should also note that it is “For the benefit of (your name)” and contain your Rollover IRA account number. Mail the check (or have the check mailed to) the Zecco Trading mailing address.
- Confirm when your former employer or Plan Administrator will distribute the funds (this varies according to each plan’s requirements).
- Visit www.zecco.com and check your account to verify that your funds have been deposited.
3 days later…
I got a confirmation in the mail from my old plan administrators saying that it was in process and the money would show up in my new account within a few days…
1 day later…
I received a call from the guys at Zecco today, they said since I was transferring shares from my old 401k plan that I needed to fill out a special form and send a copy of my latest 401k statement. I filled it out and emailed them to them. I also noticed when I signed into my Zecco account that the funds had arrived. So in less than I week I was able to complete my 401k to IRA rollover. Now I just need to convert my Rollover IRA to a Roth IRA…
1 day later…
I just checked my Zecco account and my money and shares are showing in the account.
I am simultaneously working on rolling over Linda’s 403b which is turning out to be much more time consuming than the 401k rollover. When I finish the process I will write a bit about it as well.
Have you rolled over a 401k to an IRA? Are you planning on it?
{ 5 comments… read them below or add one }
I’ve rolled over old 401k’s twice before. Both times it was pretty easy. If you’re having a hard time with the process, a rep at the new company should be able to contact your old company to facilitate the process.
One thing to be aware of is that the new rep may try to influence you to invest in certain funds, or allocate your money a certain way. If you’re not aware of what you’re investing in or the expense ratios involved, the costs could be greater than those of regular index funds.
I have a 403B Tax Dererred Account that has matured. I contirbuted 9,726.43 when I was employed at a school district in Texas. I left there and went to work at a state agency for the State of Texas. My account value as of 12/31/2010 was 11,856.06. Of course I was affected by the drop in the market in 2009 and it is now recovering. My question is should I leave it there to grow or cash it in. I will have a $25 fee for cashing it in plus of course taxes due. I am retired and 68 years old. What should I do with this amount. I currently have income from TRS, ERS and SS. I do not have a fully funded Emergency Fund but of course the possibility of losing my income is not a concern at this point.(never say never) My current tax rate is currently at or below 15%.
Personally Carol, I would leave the money alone until the stock market recovers. However, I would only do this if I were rapidly saving up a fully funded emergency fund at the same time. Hope that helps.
Your website and Dave Ramsey have been a LIFESAVER! Today we are debt free because of his and your teachings! So thank you for that! Luckily we are debt free, however my husband is being laid of Feb 3, I am a stay home mom. We will be receiving a regular paycheck for an additional 6 months in addition to a lump sum a significant amount of accrued vacation…truly blessings! But my question is re: our 401k and pension. On our 401K we have to move it within 60 days, my thoughts and research tell me a traditional IRA, but I need to do my homework on them…I’m clueless. When we rollover do we have to select what funds, stocks, bonds, etc. we wants the money to go towards?? Would you recommend since our 401k is currently with Fidelity staying with Fidelity? Also we have a deferred vested pension…or blah blah blah cuz that’s about as much of it as I understand! We have the option to leave it alone and were told it’s protected by ERISA for the future since my husband has at about 20 more years til retirement age or take a 50% cash out minus taxes and then would receive a monthly check, something super insignificant. We should leave it alone right? I’m full of questions
and I hope you don’t mind…but here’s another, would it be pointless and a costly mistake to cash out the pension and roll that money into an IRA, or are we able to roll that pension over directly into an IRA? I appreciate any advice, your site is just packed full of so much useful info…I love it! Thanks!
Cspence,
glad you have found the site so helpful! As far as your question, it seems to have a lot of moving parts, and I would suggest talking to a financial professional as they will be able to truly help you better… If you are looking for a fellow christian, check out our financial advisor network here… http://christianpf.com/christian-financial-planners/