One of my major goals for this year, along with the renovation that’s underway, was to roll over my 401k into a self-directed IRA. I could have (and should have, in retrospect) done this earlier but held off until I was 59 ½. I believed that waiting provided more flexibility if I needed funds earlier and I also was nervous about doing it. It’s basically my life’s savings and having it moved and reinvested virtually seemed a little scary. What if something went wrong? What if a digit was mistyped? What if my personal info was compromised?

It's finally DONE. Though it all worked out and my assets are safe, the process was not straight-forward and it did cause angst. I hope sharing my experience will help someone else.

First, I should thank those who commented on my post about selecting a provider for the rollover IRA account. Based on the feedback, I chose Fidelity and this turned out to be a really good decision.

I had hoped to tackle this task after the kitchen/laundry renovation was complete, just to minimize big things going on in my life at the same time. I thought that once I was 59½ , I could, without penalty, withdraw funds from the 401k. Then once the renovation was complete and life settled, I’d do the rollover.

I had difficulty processing a withdrawal from my 401k account online so I called and spoke with a representative at Empower, the 401k provider. I was informed that partial distributions were not allowed. !!! As I write this now, I have to say that based on my conversations with Empower throughout the process, that it wouldn’t surprise me if this wasn’t really true. Who knows. But it lit a fire under me. I first had to decide whether to delay the start of the renovation project or to withdraw funds from a Roth IRA. I chose to withdraw from the Roth and stay on course. That was the right move though it bothered me because that wasn’t the plan. I did not want to use Roth funds this year. Oh well. After that was done, I got with Fidelity to begin the rollover process. I had already opened the account there (with nothing in it) and they had a simple web page of the process to rollover into the account. On that page they offer to get on the phone with you as you make the request with the 401k provider and I jumped on that offer.

The Fidelity representative assigned to me stayed with me throughout the entire process. That proved to be important because it wasn’t quick and I had someone to ask questions of and vent to. I’d hoped to get a survey so I could rave about her but I didn’t.

We had numerous conversations with Empower representatives that were frustrating. In these they tried to sell me on an Empower IRA (instead of moving to Fidelity), told me that the money I had in cash in a linked brokerage needed to be invested before they could transfer it, told me that funds couldn’t be transferred to Fidelity electronically but would have to be sent to my house by check, etc. We were often transferred to different people in the same call and it wasn’t uncommon for them to contradict one another. It felt like they were deliberately making it complicated. After each conversation I would be given a task to complete which may have actually been unnecessary before we could call back. On one day I started getting texts on my phone with codes from Inspira about someone accessing my account. I am not familiar with Inspira and it worried me that it could be related to the asset transfers for the 401k. I called Fidelity and we got on the phone with Empower. They didn’t know but after being transferred around, we did find out that Empower uses a company called Inspira in some way. I am sooo thankful that I no longer have assets with this company.

This is what I learned from the process that would have been good to understand going in: my 401k had an assortment of funds that Empower allowed us to choose for investments (some appealing, some not), a linked brokerage with Charles Schwab that allowed us to invest in anything, including stocks, and company stock that I earned in bonuses some years back. We were only allowed to have 50% (max) invested in the linked brokerage. The way these assets are transferred is different and like many things, the industry has its own lingo.

Investments in the funds offered by Empower were liquidated and the cash transferred to Fidelity. (electronically too, despite an earlier Empower rep saying that wasn’t possible) There’s no choice on this and it’s scary to think that if the day they sold was a terrible market dip, the long-term impact could be substantial. It worked out fine for me but if I had known this going in, I might have done the prework myself of getting them all in a money market fund.

Investments (and cash despite what the earlier Empower rep had told us) in the linked brokerage were transferred in-kind to Fidelity. That means that each share of my stock in Schwab was just given to Fidelity for me. This transfer takes away the risk of a volatile market locking in losses.

Company stock involved a major bank. Empower was a middleman who worked with the bank to move the stock from the 401k account to the Fidelity account.

The company stock was a snafu. The bank transferred too much stock to Fidelity (over half a million bucks worth). I joked with the Fidelity rep that I’d hoped that I won some ‘new customer’ prize. The bank caught its mistake a couple of days later and withdrew the stock. When that happened, I received a generic automated message from Fidelity: “a withdrawal request has been initiated from your account. If you did not make this request, contact us immediately.” Since I wasn’t 100% sure what was going on, I did contact them. Then the bank did it again. It transferred over half a million in stock a second time. Then a couple of days later, it withdrew the stock. I got another Fidelity alert. Then the bank did the same damn thing a THIRD time. A couple of days later, it was withdrawn again. The next day the proper amount of company stock was deposited. And all my retirement assets were back together again.

The process took four weeks.