Rolling over a 401(k) can be as dreadful as facing an ex after a painful breakup to retrieve your favorite pair of soft shorts and cherry red lip gloss. You may procrastinate or even decide it’s also time for you to part ways without your beloved belongings.
What if you could send someone else to collect everything that’s yours and deliver it to you for FREE? And basically all you have to do is give them your ex’s address and yours.
Capitalize makes it that easy to reclaim your 401(k) from your ex employer and transfer it to your own investment account.
This month I used Capitalize to painlessly rollover 401k to IRA, for FREE. Even though I’m a personal finance writer, I wouldn’t have been able to rollover my 401(k) as quickly or easily without Capitalize.
I’m skeptical of “free” services, especially when it comes to anything related to finances. Big financial institutions may pay when the service sends a customer their way. Since Capitalize makes money from the big financial institutions, it makes the service free for people like you and me.
Here’s how to do a rollover 401k to IRA quickly and easily, based on my experience this month.
Please note I am not a licensed financial advisor. This information is for education purposes only. Every person has a unique financial situation. The best approach will be different for everyone. Accordingly, do your own due diligence before making any financial decision.
This post is not sponsored. That said, I do have a referral link. If you decide to rollover a 401k to an IRA using my referral link, I may be compensated at no cost to you. This helps me keep publishing more free personal finance content like this.
Why It’s Important to Roll-Over a 401(k)
How much money gets left behind in old 401(k)s? (Hint: It’s enough treasure to appeal to the Outer Banks kids.)
Just like you wouldn’t want to leave your belongings with an ex, you don’t want to leave your 401(k) money with your ex employer.
Now you may be thinking, who could forget about their own money??? Every year 2.8 MILLION 401(k) accounts get abandoned. For context, we would need 33 of the biggest football stadiums in the U.S. to seat all those people!
Don’t give up on your money in your old 401(k)!!! Roll it over as soon as possible.
I understand why people put it off. You left a job and your focus is on the next part of your life. It can be difficult to know where to begin or that you even are supposed to take action.
That’s why I like Capitalize because they make the process painless, easy, and fast.
- Their simple, clear, step by step instructions helped me initiate the rollover process in just 20 minutes.
- Then I had a 10 minute call with one of their customer service consultants to walk me through the final steps to execute the rollover.
- Lastly, they sent me a prepaid envelope with tracking to mail the 401(k) check to its new home.
I estimate it would’ve taken me 2 hours or longer to figure out how to do this on my own and complete the process.
Here’s a more detailed breakdown of each step in the process.
How to rollover 401k to IRA using Capitalize
Start the 401k rollover
I heard raving reviews about Capitalize from other well-respected personal finance bloggers. I wanted to check it out for myself to see if the hype was warranted. (And it certainly was!)
I started the process by using a referral link, like this one: https://hicapitalize.com/?r=hRNJmcK.
(Links like this one help me keep the information on this blog free.)
Then they’ll ask you where your 401(k) is. I did not know, but there’s an option to search for your employer. I was pleasantly surprised to see they knew where my 401(k) was, even though I had worked for a small employer (<200 people). (Talk about saving me time on the phone trying to hunt down my 401(k).)
Then they’ll ask if you already have an IRA to roll it into. I did not, as my 401(k) was a traditional 401(k), and I wanted to roll it into a traditional IRA.
If you do, you can choose to roll it over there. If not, they’ll provide instructions to open one. They offer a few recommendations with explanations. Or if you’re like me and you already know what financial institution you want to use, you can choose your preferred broker.
I chose the low cost broker I have my other investment accounts with so they are all in the same place. (And low cost brokers like Vanguard, Fidelity, and Schwab are my favorites.)
At this point, they asked me to create an account with Capitalize. Then they directed me to my preferred institution’s website to open up the new IRA needed for the rollover.
After following the steps to open the IRA, I went back to Capitalize. I shared the IRA account details so they knew where to transfer my 401(k) to.
Complete the 401k rollover
Then I scheduled a 15 minute call with one of their consultants to complete the rollover.
Essentially, I had to log into my 401(k) provider and click some buttons to initiate the rollover process. Now, I know that is super vague because I wouldn’t have been certain what buttons to click without guidance. This saved me an hour or so on the phone trying to reach the right customer service rep for guidance.
The consultant knew exactly what I should do and answered all the questions I had as we were going through the process. This was a VIP experience.
(The reason you have to click all the buttons is because Capitalize never has access to your accounts or your money. Capitalize provides the detailed instructions to ensure your money gets to the right place.)
Send the funds to your preferred financial institution
She then explained my final next steps.
My 401(k) provider wouldn’t transfer the funds electronically, so Capitalize sent me a pre-marked envelope with prepaid postage and tracking. When I got the check from my 401(k) provider in the mail, all I had to do was put it in the envelope Capitalize gave me with the instructions they already had typed up and stick it back in the mail.
They notified me when my check arrived at its new home, and I saw the funds in the new account in a couple of business days.
After that, the role Capitalize plays ends. (Although my customer service consultant did circle back with me at the end to check on me!)
Re-invest your money
Lastly it was up to me to re-invest the money. I had to sell all my investments to get the cash in the check. Once the broker received my check, I re-invested in my favorite investments, index funds.
This last step is debatably the most important step, otherwise you just have cash, which is not the point of a retirement investment account.
Conclusion
Capitalize is your best friend as you part ways with your ex employer. They make getting your money back easy, fast, and painless.
It starts with initiating the 401(k) rollover process online, having a 15 minute 1:1 call to complete the rollover, and sending your funds to their new investment account.
So if you want an easy, painless way to reclaim your money from your ex employer, check out Capitalize.
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