I have a 403(B) with a former employer (traditional and Roth) that I'd like to rollover into a Vanguard IRA. Went to the website, started setting up an account and got to the funding step. Vanguard uses Yodlee for bank connections/transfers but Principal, my 403(B) institution, isn't listed. Only option for manual linking is using routing/account numbers which Principal doesn't provide (that I can find anyway).
Then I thought I'd just have Principal issue a direct rollover check to Vanguard… but for that, I have to provide a Vanguard account #. And I can't get an account # without the previous bank connection step.
I'm going in circles and gave up on Vanguard customer service after being transferred to four different people who kept saying they couldn't help me. This terrible customer service has me doubting Vanguard is the best IRA option for me. Other options:
- Move my Principal 403(B) to a Principal IRA
- I have a Schwab brokerage account – I could set up a Schwab IRA but I hear cash sweeps are better at Vanguard than Schwab (then again I don't fully understand what cash sweeps are so maybe this doesn't matter – I plan on setting/forgetting after the transfer)
- Try Fidelity
Open to any recommendations. Thanks in advance.
Difficulties rolling over 403B to a Vanguard IRA
byu/auspicious-moon ininvesting
Posted by auspicious-moon
1 Comment
You are probably making this harder than it needs to be because Vanguard is trying to treat the funding step like a bank transfer. A 403(b) rollover usually is not an ACH bank link/Yodlee situation.
I would handle it in this order:
Open the IRA first at the custodian you actually want. If Vanguard cannot get you to a live IRA account number without the funding loop, that alone is a good reason to consider Fidelity or Schwab. Either one can handle a direct rollover cleanly.
Make sure you open the right receiving accounts. Traditional/pre-tax 403(b) money should go to a traditional IRA. Roth 403(b) money should go to a Roth IRA. Do not let the pre-tax and Roth portions get mixed.
Ask Principal for their direct rollover paperwork and exact payee instructions. Usually the check is made payable to the receiving custodian FBO you, not personally to you. That helps avoid withholding and accidental taxable distribution issues.
Do not pick the custodian based on the cash sweep unless you plan to sit in cash. If this is truly set-and-forget, the bigger issues are service, clean rollover handling, investment options, fees, and whether the platform is easy enough that you will actually use it.
Your options are basically leave it at Principal, roll to a Principal IRA, roll to Schwab/Fidelity/Vanguard, or convert some pre-tax money to Roth if the tax math supports it. I would not cash it out, and I would not force Vanguard if their service is already this painful before the account is even open.