I rolled over my 401(k) because I thought it was the smart financial move. Several delays and 5 months later, I regret even starting the process. (2024)

My primary motivation was consolidating my retirement funds. About four years' worth of savings was in an account with Fidelity, while another two were in an account with Vanguard.

I figured it would be nice to have everything in one account. Neat and tidy.

While there is a happy end to the story — all of my retirement money is now neatly in one place — the rollover process was anything but tidy. It took nearly six months. Two five-figure checks were lost in transit and eventually voided. Multiple times throughout the process, I regretted initiating it in the first place.

Part of the problem was my own procrastination, part was bad luck, and part was an inefficient system. While my case may have been a little on the extreme side, a financial planner assured me that I'm far from the only person to have struggled with a 401(k) rollover. But more on that later.

Here's a timeline of exactly what transpired between August 2023, when I started the rollover, and January 2024, when my funds landed:

Early August 2023: I'm revisiting my financial goals, which are about to be impacted by a cross-country move from Los Angeles to New York City, and I feel inspired to combine my retirement funds into one account.

My first step is contacting Fidelity, where about four years' worth of retirement savings from my previous employer has been growing in a target date fund, to initiate the rollover.

August 15, 2023: Fidelity cuts two checks — made out to Vanguard, not me (this, I later learn, is key) — and mails them to me. I've contributed to both a Roth 401(k) and a traditional 401(k), hence the two checks.

About a week later, I receive two physical checks in the mail. Combined, it's a six-figure amount. I've never had this much money in my possession, ever. I put them in a safe place.

September 20, 2023: I put the checks in too safe of a place, apparently, and forget about them.

More than a month passes before I reach out to Vanguard to ask about the next steps. This is when things start to get confusing. When I call Vanguard, I learn that a financial institution called Ascensus Trust does the recordkeeping on their behalf. I was supposed to make my rollover checks payable to them. This is when I realize I should have contacted Vanguard/Ascensus to fully understand the process before requesting my funds from Fidelity.

After the phone call, Vanguard emails me a rollover contribution form. I pay $8.73 to print the form at UPS.

September 27-29, 2023: The form stumps me for a week — specifically, the "rollover contribution information" section, which includes phrases like "attributable to basis."

There's also an "authorization" section that my current employer needs to sign.

I fill out the form, minus section 2A, in hopes that HR can assist with that line.

HR emails me back two days later, noting that I must complete 2A before they can sign off. They offer a brief definition of "the Roth basis."

October 16, 2023: I sit on the form for another two-plus weeks. Section 2A is in my head. Is this form actually confusing and jargony, or am I just inept?

I avoid 2A until mid-October, at which point I email HR to ask for help, more explicitly this time: "Can you actually help me figure out what numbers to include?"

October 27, 2023: With no response yet, I fill out 2A to the best of my ability, assuming I have a 50-50 chance of submitting the correct answer. I'm reminded of standardized testing in grade school.

HR signs and returns the form that same day. No notes on 2A.

The next step is printing the form so I can mail it, along with the checks (still made out to Vanguard), to Ascensus Trust. Naturally, I delay creating an online print order and grow nostalgic for the at-home printer days.

November 14, 2023: I receive an email from Fidelity titled "Outstanding Check 1st notice."

Fidelity is reminding me to please cash or deposit the checks immediately. That snaps me back into action: I create an online print order and pick up a copy of the signed rollover contribution form that same day at UPS. This time it costs me just $2.94.

November 18, 2023: It's a crisp Saturday morning and I walk to the post office closest to me in Brooklyn, New York, my rollover contribution form and two checks in tow. I wait in a long line, send certified mail for the first time, and receive a tracking number.

At last, the checks are out of my possession. I breathe a sigh of relief.

Early December 2023: Thanksgiving comes and goes. At the beginning of December, as I do every month, I tally up my savings and investments in an Excel spreadsheet to calculate my net worth. My Vanguard retirement account balance is essentially the same as in November; the Fidelity funds have not yet been deposited.

I find a photo I'd taken of my USPS receipt, enter my tracking number on USPS.com, and learn that the envelope containing my two checks is "Moving Through Network; In Transit to Next Facility, Arriving Late."

December 11, 2023: I've been tracking my mail for over a week. On this particular day, I'm at a coffee shop in Brooklyn Heights when I log into the USPS tracking system, only to find the same "Moving Through Network" message.

At this point, I don't know what to think. My mind goes to the worst-case scenario: Have I lost six figures worth of retirement savings?

I lose it briefly, in the coffee shop. Frustration tears roll down my face. And then I call Fidelity to tell them my rollover checks have been lost in transit.

The first representative I get ahold of advises I call Vanguard. I call Vanguard and they advise me to call Fidelity. The second Fidelity representative I speak with says she can void and reissue the checks. I ask her to send them to my mom's home in North Carolina, where I'll be for the holidays.

I return to UPS for a third time to, once again, pick up a copy of my rollover contribution form. This time, the print costs me $3.16.

Late December 2023: I fly to Charlotte on December 20 with a copy of my rollover contribution form. The new checks beat me to North Carolina.

I celebrate Christmas with my family, take some time off from work, and don't go to the post office. Only after I return to New York on December 26 do I realize I've left my contribution form and checks at home.

My mom, the true hero of the story, agrees to complete the final step for me: She overnights my contribution form and checks to Ascensus Trust on January 2. I Venmo her $28.

January 10, 2024: My editor, who is vaguely aware of the months-long rollover saga and knows I might want to write about the process, asks for a 401(k) update. I admit I've been too nervous to log in to Vanguard and see if my funds have been deposited. I check my account after the meeting. The funds have arrived!

I call my mom immediately to deliver the good news.

Consulting an expert: 401(k) rollovers are 'a pain in the backside,' and consolidation is key

As I mentioned earlier, I'm partly to blame for the drawn-out process. I'm really bad at completing any errand-resembling task — going to the post office, printing things, talking to customer service reps — even when a lot of money is on the line, apparently. I also tend to avoid or ignore tasks that stump me rather than confront them head-on.

But how much of this saga could I blame on an inefficient system, and do other people struggle with 401(k) rollovers?

I asked a certified financial planner and the cofounder of Facet Wealth, Brent Weiss.

First, I asked him if it was the right call to even consolidate my 401(k)s into one. My motivation was convenience: I thought it would be easier to have just one retirement account to track and manage.

He agreed: "When all of a sudden you have two plans and then you change jobs and you have three or four plans, you inevitably forget about two of the three or three of the four, and that's not a good thing for your money. Consolidation can be a great decision if it's going to help you take action in your plan and make sure you're monitoring and reviewing it."

That said, he pointed out that there are other factors to consider before initiating a rollover, like the investment options and fee structures of the plans.

"Since you're with Vanguard — they're one of the lower-cost providers and they also give you some really good investment options — my guess, without seeing your account or understanding your plan, is yes, it was a great move," he explained. "But it is plan-specific when I say 'yes' or 'no' to rolling the money into a new 410(k)."

If my old plan had lower fees or more favorable investment options than the new one, I would have wanted to leave my money there, he said.

Make sure to select the correct check recipient

While I did a lot of things wrong throughout the rollover process, I at least executed one crucial step correctly: I made the rollover checks payable to Vanguard, rather than myself. (It ended up not mattering that my checks were made out to Vanguard. Ascensus still accepted them.)

Had I requested the checks be made out to "Kathleen Elkins," I would have had to come up with about $20,000 cash.

If you have the check made payable directly to you, your plan administrator is required to withhold 20% for taxes, Weiss told me. And there's a kicker: "If you want to complete that rollover, you have to come up with the 20% gap — money you have somewhere else — to then put it into the 401(k). So you take the check for 80%, you find the delta 20% somewhere else you have cash, move it into your 401(k), and then when you file your taxes, you get the 20% back from the 410(k)."

You have 60 days from the time of the withdrawal to contribute the 20% into your new 401(k). Based on my track record, I definitely would have missed that deadline.

If you can't make up the 20% in 60 days, the IRS considers it an early withdrawal from your account. It'll be subject to income tax and you may owe a 10% early withdrawal fee if you're under the age of 59½.

When I told Weiss about the lost checks, he wasn't completely surprised.

"I've been doing this for 20 years and unfortunately, I've seen this happen one too many times in terms of checks getting mailed: They get lost or they get rerouted or they show up three weeks late," he said, noting that the entire time the money is in transit from one account to the next, it's not being invested. "If the market is going up, it's not a good thing. But there have been times when I've had clients do rollovers and it takes two weeks to get the checks in the account and the market's dropped 10% and it actually worked out for them."

I also brought up my surprise at being mailed physical checks — how it seems archaic and outdated in a day and age when I can transfer money to someone on the other side of the country in minutes, via Zelle.

Turns out, the process is inefficient for a reason.

"If you want my personal take on this, I think it's because 401(k) providers have an incentive to keep your money because the way they make money is based on how much money is on their platform," said Weiss.

When 401(k)s were first becoming popular in the 1980s, "we didn't have the ability to do wires or fund transfers, so checks made sense," he added. Checks, of course, make less sense now, "but there's no incentive for a Fidelity or a Vanguard to invest in the technology to allow you to easily move your money off of their platform."

It's working. I never want to initiate a 401(k) rollover ever again.

If I ever have to, though, Weiss' best recommendation is to get professional help from a fiduciary advisor who should be able to complete the process start-to-finish in two weeks.

While section 2A wouldn't stump him as it did me, Weiss did admit that the process is "a pain in the backside," even for financial planners.