Most financial advisors tell you that when you leave a job, don’t forget to take your 401(k) with you.
The thinking is that rather than letting that money sit in an account controlled by and for people with whom you are no longer associated – as many people do – you instead roll it over into an IRA that you can then control and ultimately add to.
In the abstract, it’s sound financial advice. In reality, it’s a giant pain in the ass. That’s why so many people can’t be bothered.
When I left my job in August, I was already making plans to take my 401(k) with me.
I told Vanguard, holders of my Roth IRA and soon-to-be rollover IRA, to be prepared. I contacted Fidelity, holders of my 401(k) and asked them to roll the money over.
Both sides said, “No problem.”
In reality, there were several problems.
A few weeks after my first day – when I still waiting to get paid by both entities – I finally received a tidy little check from Fidelity, which I was to then forward on to Vanguard. Why Fidelity couldn’t mail the check directly to Vanguard or, better yet, do an EFT (electronic funds transfer), I’ll never know.
So I sent the check to Vanguard and waited. And waited. And waited. Because I’m dumb, I didn’t send it certified, so I had no way to track the check. I assumed it arrived. Or perhaps it was taken by the mail carrier. Or maybe low tech thieves got their hands on it. Maybe the Pony Express was suffering delays.
It was supposed to arrive in two days. After ten days, I called Vanguard. They couldn’t find my check, but told me to be patient. After another week, I called again. The customer service rep was friendly and it turned out we had attended the same high school. Despite this obvious sign from the financial gods, he couldn’t help me and suggested I call Fidelity and ask that they put a stop payment on the check and cut me a new one. This I did and the rep at Fidelity said it wasn’t a problem and added, “You know, if you left your money with us, none of this would’ve happened.”
Yeah, I know.
Fidelity overnighted the crisp new check, so I had it in my bag the next day. I was planning on hitting the post office, but I received a voicemail from Vanguard informing me that they had deposited my original check and they apologized for the delay.
I checked my account and, presto, the money was there. Not only that, but it was double the amount! I guess they were so eager to deposit it, they counted it twice.
So, I called Vanguard again and explained what happened. I was told that the fraud department would double check the transaction and, at that point, would remove the duplicate funds. Bummer. I then called Fidelity to ask what to do with my new check and I was informed that the original check did indeed have a stop payment on it, meaning that the check would bounce.
Sure enough, a couple days later, I logged on and saw that my Vanguard Rollover IRA account was in the red. I had gone from double the amount to a negative balance. At this rate, I’ll never retire.
I called Vanguard for the 186th time and a very confident young man took my call. I once again informed him of the situation and he casually told me to mail the new check. What was the big deal?
“So I’ll just mail the replacement check?” I asked.
“Yeah, there shouldn’t be a problem,” he said.
“There was a problem last time,” I countered.
He paused for a long moment before asking, “Is there anything else I can help you with today?”
I was so angry and frustrated, but was determined to make sure this transaction happened. Like Jack Reacher, I could never go back.
Last week I lived at the office, so I couldn’t make it to the post office. I was finally able to get there yesterday. I talked to the kindly gentleman behind the counter and informed him I needed certified mail with a receipt and anything else I could get to ensure it arrived expeditiously.
I filled out the proper envelope and handed it to him.
As he was ringing me up, I glanced down and noticed that instead of Wayne, PA, home of Vanguard, I had written the address as Wayne, NJ, the town located next to my in-laws’. I mentioned it to the clerk and he said, “No problem,” and made the correction. I paid and was given my receipt and my instructions on how to track the package.
But what if I hadn’t caught the mistake? Wayne is a relatively substantial town with a population of 55,000, which, in fact, is larger than the one in Pennsylvania. Thus, it’s plausible that my check could’ve been sent there and, upon realizing there’s no Vanguard office in New Jersey, it would quickly be lost in the vast web of the postal service, especially if Newman was telling the truth when he announced that zip codes are meaningless.
As I left the post office, I thought to myself, “Maybe that’s what happened the first time.”
Maybe, but it’s still easier to blame the banks. #OccupyWayne
Update a few days later…
When I wrote and published the above post, I thought everything was about to be cleared up.
After all, I had called Vanguard and told them a check was coming and had sent the letter via certified mail. I mailed it on a Tuesday and, I had a tracking number that informed me the check was scheduled to arrive on Thursday. I was flying to Los Angeles to perform a wedding on Friday morning, so the timing was working out splendidly.
Or so I thought.
On Thursday afternoon, after refreshing the USPS Tracking webpage all day and seeing no change, I received a call from Vanguard’s margin department (collections for investments). I was told that my account would be frozen if I did not take corrective action to cover the shortage in my account that had resulted from the market dropping. I told the rep about the check and even gave him the tracking number. He said he was giving me a one day extension. How generous of him.
That night, after the letter had failed to arrive and not wanting to worry about anything while on the opposite coast, I transferred more than enough money to cover the shortage. I packed for my trip and slept well.
The next day, as I was landing, my phone vibrated with a voicemail. It was from the same rep as the day before informing me that my account was now frozen. I was annoyed and confused, but decided to worry about it later. After all, it was after 6 p.m. on Friday back east, so I couldn’t do anything until Monday anyway. I forgot about it and enjoyed my trip.
On Monday, I checked my account and saw that it was still short. By ten dollars. The market had fallen a bit more and my transfer to cover was juuuuuuuuust a bit short. Since the account had been frozen, it wouldn’t go up or down with the market, so I once again initiated a transfer to cover the shortage plus a little more.
It has been a week and, as I type this, the certified envelope containing the check still has not arrived.
I called the post office at which I had dropped it off. I even tweeted the USPS. I was given the same response at every turn – until another scan is received, no one can determine where it is.
So, I ask: what good does it do to send something certified?
The person behind the @USPSHelp account tried to reassure me via direct message:
“Please understand, we are not saying the item is lost. Certified Mail provides proof to the mailer, in the form of a signature by the recipient, that the item is received when its [sic] delivered. Hopefully, you will see scan events soon.”
So, once again, I’ll be patient.
But if I need to go through this nightmare again, I’ll either not use Vanguard or I’m going to drive it there myself and staple gun it to a rep’s forehead. He’ll probably still lose it.
A few hours after I slid into the Post Office’s DM’s, I received an automated email informing me that my letter had arrived in the Pennsylvania post office. Coincidence?
By Friday, the check had been received by Vanguard and I had to call them because the fraud department flagged it as a duplicate payment. No, I explained, it’s not a duplicate. They said okay and that they’d deposit it.
It’s now been a few days and I check several times per day to make sure it’s still there. And not negative.
You can’t be too careful.
Christopher Pierznik’s nine books are available in paperback and Kindle. His work has appeared on XXL, Cuepoint, Business Insider, The Cauldron, Medium, and many more. Subscribe to his monthly reading review newsletter or follow him on Facebook or Twitter.