My vote is for “just annoying”… fund managers are a bunch of wankers.
After I got laid off in 2003, I decided to roll my 401K into an IRA. Well, “decided” to. I didn’t have much of a choice. The employer in question weren’t able to tie their shoes without burning a few million dollars… even if they were the velcro no-lace model. They had already made a pooch screw of my health insurance – who’s ever heard of being forced to change providers once you’re on COBRA? Or the fact that they sent all of the notices through email (which were sucked up by my SPAM filter, since they were “advertising” new insurance plans) and never followed up on anything? At least three different times I had to run to a fax machine or FedEx store, because there was a “we need this tomorrow or we drop you” voice mail left for me by the insurance broker. That was their idea of a follow up. The fact that I had four different “final” pricing only added gas to the fire – I recall at once point telling them that “if you want your $2.16 administrative fee, you should have told me on the ‘third final quote’. In fact, if I had already packed my check book, you would have been getting this ‘fee’ in pennies” because it was such a debacle.
Consequently. there was no way in hell that I was letting them control 6 1/2 years worth of 401K contributions, for any length of time. I would have liked to have just shoved the money into a new 401K plan, but it was looking like it would be some time before I could land a full time job – which was true! – so I shoved it into an IRA as a stop gap measure.
Now, what really pisses me off is that I can’t take the cash from the IRA and push it into a new 401K. But fine, there’s rules or tax reasons, etc. – whatever. Personally, I don’t much like putting my “retirement” plans into a plan that has this cloak and dagger crap around it. I mean, I’m pretty nifty with numbers and I can follow rules… why in the hell does it feel like a D&D game whenever ya have to work with a 401K or IRA plan? I swear, there’s a Dungeon Master involved and he changes the rules every time you throw the dice.
Case in point: I get mail from my current IRA company on a weekly basis, more or less. For a while I opened everything… I found ads, life insurance policy offers, etc., and the statements were of little interest, since this was money I couldn’t touch for another 20+ years. After a while, it became a “yeah whatever”. Three weeks ago – smack in the middle of my move – they sent out a non-discript letter that got put in a pile. This past week I got two more letters from them… On a whim I opened them and was greeted with checks that made up two-thirds of my IRA account. WTF is this about?
Seems that the first letter announced – I dug it out of a paper pile – that they would be liquidating two of the funds I invested in. Have you ever heard of such a thing? I hadn’t. Ever. Oh, and because I didn’t tell them to rollover the cash before they were liquidated, I got cash -10% that was withheld for the federal early withdrawl tax and I’m on the hook for additional annual taxes, because it’s considered income. Oh, wait – isn’t this what I purposely AVOIDED BY NOT CASHING IN THE 401K IN THE FIRST PLACE?!
Now, if I want to avoid the tax hits of both early withdrawl and additional income, I have to cash the checks and send the IRA company new checks for the total amount. The 10% I can’t get back until tax time – yeah, you heard me: they will send me a 1099 with the amount and I get to say “Oh, I don’t have pay tax on this, because I rolled it over” and that money goes back into the IRA.
And this little snafu means that I’ll have to take my ass back to H&R Block again next year for another anal cleaning, er, I mean tax consultation… I don’t know that TurboTax will have the smarts to handle a fucked up situation like this, and I was counting on a nice and simple tax year. Fuckers.
Man, am I annoyed. I should just eat the 10% and the 38% and plop the rest into the house… Replace the kitchen counters, the Washer/Dryer, and the fridge… And new blinds… Maybe retile the shower earlier than I thought… Hm.
Nah – I’m still annoyed by this.
*snores* Financial mumbo jumbo. Talk about something like more interesting, like Halo2. :D
Next time I see you I’ma stick a plasma ‘nade to yer head :)
Yeah. We’ll see.
That will teach ya! :-) I have the same habit of not reading everything myself…. And I think Turbo Tax will be smart enough. It works out the social security overpayment ok… and I know my boss has a bunch of K-1’s and stuff and he uses it.
Yeah, yeah, yeah! Anyway, the follow up has left me feeling pretty optimistic about it.
I kept calling the IRA people back until I got the same story from different people three times over. Here’s what I have to do, to avoid the early withdrawl penalty AND being taxed on the whole amount as income:
– cash the checks
– find out the total amount withheld for the feds (the 10%)
– send to them the total amount of the checks and the 10% withheld on their end (out of pocket money!).
By Jan 31, they will send me a 1099R (new form to me) that says yes I got money from an early withdrawl from an IRA but it was reinvested, so there’s no tax on the reported income and no penalty – here’s your cash back. And TurboTax is aware of the 1099R form or so they told me. I’ll know by next March either way!
So I’m out of pocket for 10% of my retirement, just after buying a house – perfect timing :)
I am in the middle of IRA rollover hell as I write this. 7 reps with different rules on the custodian side, and 3 reps on the IRA receiving (snatching) side. Still locked in limbo with no end in sight. IRA has made ~ $2000.00 in 11 years! I could have made more from a 3% bank account. WTF over? I hate suit and tie criminals, they look and smell nice…but they are rotten to the core.