Archived DC Default IRA Rollover

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Former employee here....

So I made a mistake. In the process of moving and everything, I never got around to making a decision on what to do with my 401k money. My current employer has a 401k and I wanted to move my balance to that...so I just checked my 401k account today on my pay and benefits. So, wouldn't you know it...YESTERDAY, there was a transaction for an automatic forceout...I have over 2 grand in my 401k account and I didn't know they could just force me out when I had that amount of money in the 401k. Anyway, this is what it says...

Destination for Cash Rollover

Cash Rollover $(amount)

DC Default IRA Rollover
Key Bank
Account Number: (account)
Rollover Type: Traditional IRA
Routing Number: (routing number)

So how do I proceed on this? I'm assuming I will receive a letter on how to access this new account because I'll need to in order to transfer the money in it to the 401k...and now that it's in an IRA I hope it doesn't prevent me from moving the money to the 401k at my new job. I'm so mad at myself for not doing this sooner. I hope someone can help me.
 
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It has become income for you. You will pay a 33% tax. Without delay, call your bank & tell you want to setup a Ira acct. it can be separate from your job 401k, which is ok. Your bank maybe able to get around this.
So hurry up!
 
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Well it actually says in my OP that they set up a traditional IRA at Key Bank when they closed it out, so I don't think that's what happened. I just need to know the protocol for accessing my traditional IRA at this new bank.
 
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How long did it take for them to force you out? I've got a fair bit sitting in my 401k and worry the'll force a pay out before i can get a 401k with my next employer.
 
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How long did it take for them to force you out? I've got a fair bit sitting in my 401k and worry the'll force a pay out before i can get a 401k with my next employer.

My employment ended in November and the forceout was the 28th

The job I took after Target had no 401k so I didn't do anything and the job I took now just notified me I was eligible for the 401k last week....so it sucks for me right now on this front.
 
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How long did it take for them to force you out? I've got a fair bit sitting in my 401k and worry the'll force a pay out before i can get a 401k with my next employer.

My employment ended in November and the forceout was the 28th

The job I took after Target had no 401k so I didn't do anything and the job I took now just notified me I was eligible for the 401k last week....so it sucks for me right now on this front.

An IRA is functionally the same thing as a 401k, except that the employer is not involved. Yes, it would have been convenient to have the old 401k
balance rolled over to your new employers 401k, but now that it's in an IRA you probably won't be able to do that.

What you can do is make sure the money is in a low cost IRA. I don't know what Key Bank charges in fees, but I'm sure Target didn't shop for the best deal for you.

Call one of the big low cost mutual fund companies - Fidelity and Vanguard are two that I have used - and they will be happy to help you with a rollover IRA. Besides low cost a big advantage will be the almost infinite choice what to invest your money in. They are also very consumer friendly so once you have an account almost everything is handled online.
 

buliSBI

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I went through the same thing for my pension because I was waiting to decide if I wanted to combine it with my 401k or a separate IRA.

Anyway, if you left retirement funds and employee stock with Target after 90 days of leaving the company, it will be automatically rolled over to an outside institution. I take it was Key Bank (I was the same). Its a good institution. But you may want your money closer to you. You will get a letter in the mail about the creation of the account.

I am not sure if it has to stay in there a certain amount of time. I know it will take a few weeks to process the transfer from Target to KeyBank.

I ended up letting it sit there for about 2 years before I finally decided to move it to an IRA at my credit union. Definitely when you get the first chance to move your 401k funds to your new company 401k. If you have any pension funds, transfer those to a separate IRA or keep it there.

I know you will need to know your account number and the amount transferred/last contribution in order to talk to Customer Service about your account.

Just make sure you get rollover transfer to another institution. Never ask for a direct payout. You will get taxed heavily.
 
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I went through the same thing for my pension because I was waiting to decide if I wanted to combine it with my 401k or a separate IRA.

Anyway, if you left retirement funds and employee stock with Target after 90 days of leaving the company, it will be automatically rolled over to an outside institution. I take it was Key Bank (I was the same). Its a good institution. But you may want your money closer to you. You will get a letter in the mail about the creation of the account.

I am not sure if it has to stay in there a certain amount of time. I know it will take a few weeks to process the transfer from Target to KeyBank.

I ended up letting it sit there for about 2 years before I finally decided to move it to an IRA at my credit union. Definitely when you get the first chance to move your 401k funds to your new company 401k. If you have any pension funds, transfer those to a separate IRA or keep it there.

I know you will need to know your account number and the amount transferred/last contribution in order to talk to Customer Service about your account.

Just make sure you get rollover transfer to another institution. Never ask for a direct payout. You will get taxed heavily.

Yeah it's Key Bank, which actually has branches near me. I had a feeling it would take a few weeks to finish the transfer, so thank you for letting me know that it's indeed the case. You were a big help, I'm going to wait for that letter and then use the account information they give me to roll over the IRA into my 401k at my new job.
 
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mxrbook

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You can roll your old 401(k) money into your new 401(k), but it’s usually not the best option. Company 401(k)s, by their very nature, offer limited investment options, and they may carry higher fees or offer lower returns than regular IRAs. Just don't cash out as that will cost you - 10% for early withdrawal if you're under 59 1/2 plus whatever your tax bracket is (28% or higher).
 
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You can roll your old 401(k) money into your new 401(k), but it’s usually not the best option. Company 401(k)s, by their very nature, offer limited investment options, and they may carry higher fees or offer lower returns than regular IRAs. Just don't cash out as that will cost you - 10% for early withdrawal if you're under 59 1/2 plus whatever your tax bracket is (28% or higher).

I definitely won't be cashing out. I am considering my options and may keep the money in the IRA if I like it compared to the 401k plan offered by my job.
 
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