I have a 401(k) to transfer to an IRA, and have looked at some options but I am wondering if anyone has looked into what the best bonus is for transferring a balance? I see an offer from Sofi for a 1% bonus on the balance transferred which is better than anything I see from anywhere else.
Are there any disadvantages to Sofi as a bank for an IRA? They require that I use a company called Capitalize to do the transfer but I don't see any fees or other pitfalls to doing this other than needing to keep the funds there for at least two years, which really isn't an issue.
Does anyone know of a better offer for moving a 401(k)? The 401(k) has about 300k and I also have a Roth IRA with about 100k to transfer.
Are there other banks offering perks worth transferring a balance to? Chase doesn't seem to offer anything for retirement funds but they are otherwise my main bank/brokerage.
401(k) rollover, is there a better option than 1% balance bonus?
byu/LawlessCrayon inpersonalfinance
Posted by LawlessCrayon
3 Comments
Why are you only considering banks? What about brokerage companies such as Vanguard or Fidelity? I rolled a 401K over into an IRA with Vanguard back in 2005. Never added to it as I have a 401K at work. Just watch it grow. Any other work 401K will get rolled into the same IRA account.
You’re focusing on the wrong thing by chasing a transfer bonus. Fees, investment options, account features and customer service are way more important than a 1% one time bonus.
Don’t know much about Sofi, but I’m guessing the fees are much higher than one of the big three (Vanguard,Fidelity and Schwab).
Personal preference is fidelity because vanguard customer service went downhill. You can still invest in vanguard ETFs for free at Fido. Account features are top notch at fidelity too compared to the other two. Vanguard has lower fees and better money market funds but that probably doesn’t apply for a rollover 401k either
The low fee / no fee brokerages that lead the industry – Schwab, Fidelity, and Vanguard – do not offer 401(k) transfer bonuses. The ones that do, have some sort of game plan to extract fees from you.
SoFi charges 0.2% on some mutual fund purchases, which is highly unusual. They also will happily sell you mutual funds with an up-front sales charge (they keep the charge as a commission). The “big three” brokerages will in many cases sell you a mutual fund that has a sales charge, without actually taking the commission, meaning more of your money goes to work for you.
Their fee schedule list quite a few “nickel and diming” fees, for example a $50 “corporate action” fee – which can be something as simple as a share split (which you have no control over).
> I also have a Roth IRA with about 100k to transfer.
SoFi does not pay a bonus on IRA transfers.
Bottom line is, no vendor is going to pay you a bonus that they do not fully expect to re-coup in the form of fees, margin interest, or other revenue streams. “There ain’t no such thing as a free lunch.”