A good reason is that "stuff happens," and the ability of a medium-sized firm to keep their 401(k) plan stable may be affected by mergers, or business failures, or a sole-proprietor CEO whimsically changing 401(k) providers, or the 401(k) provider being a small firm that runs into problems of its own.
And there's also the issue... let me think, I've had one, two, three, four jobs with 401(k) plans and if I hadn't kept rolling them into a rollover IRA, I would have had to track four different accounts on my spreadsheet to get a consolidated picture of our retirement savings.
It was wildly unimportant but I nearly lost $500 due to confusion and chaos in one of my employer's 401(k) plans.
My spouse missed out on an opportunity to do a custodian-to-custodian rollover because the plan manager, Fidelity, sent out a notice that the account was automatically being terminated due to a low balance, and there was a sixty-day deadline for a custodian-to-custodian transfer. My spouse's employer was failing and in the process of being bought out by a competitor. Fidelity needed some account number detail from HR, and during those sixty days, HR sort of didn't exist or at any rate wasn't answering or returning calls. So the deadline passed and the account was cashed out. Hardly a tragedy, but, as I say "stuff happens."
And there's also the issue... let me think, I've had one, two, three, four jobs with 401(k) plans and if I hadn't kept rolling them into a rollover IRA, I would have had to track four different accounts on my spreadsheet to get a consolidated picture of our retirement savings.
It was wildly unimportant but I nearly lost $500 due to confusion and chaos in one of my employer's 401(k) plans.
My spouse missed out on an opportunity to do a custodian-to-custodian rollover because the plan manager, Fidelity, sent out a notice that the account was automatically being terminated due to a low balance, and there was a sixty-day deadline for a custodian-to-custodian transfer. My spouse's employer was failing and in the process of being bought out by a competitor. Fidelity needed some account number detail from HR, and during those sixty days, HR sort of didn't exist or at any rate wasn't answering or returning calls. So the deadline passed and the account was cashed out. Hardly a tragedy, but, as I say "stuff happens."
Statistics: Posted by nisiprius — Sun Sep 01, 2024 8:22 pm — Replies 20 — Views 1864