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Re: Banks mistakes in 401(K) to Roth IRA..?

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The errors are multiple in nature but not math errors....ie classifying a T to T as a regular contribution....and giving wrong info .... too detailed and numerous for me to write right now but I will try to give more detail later when I have time!!  Thank you for your input!!

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Re: Banks mistakes in 401(K) to Roth IRA..?

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Thank you for response and info..   IRS does allow T to T from 401(K) to Roth IRA...The intermediate step to Traditional IRA is not necessary and the financial institutions should know this! And I do pay taxes on the T to T to Roth..  Especially since I am withdrawing monthly (It is to my advantage to do so), the extra step to Traditional first creates alot of work that is difficult since each time I would need to go into the bank/financial instiution for each and every transaction.  I have disability such that it is a hardship to do so.  The funds from 401(K) show as regular distribution but the receiving Trustee should NOT ALSO show regular distribution which would equal double taxation!!  ie IF both Trustees show regular contribution IRS would expect me to pay taxes on the same money twice...  ALSO a regular contribution comes from earned income,,,I DO NOT have any earned income and thus CANNOT make regular contributions NOW that I am retired... Thank you again for reponse... I am still wonderfing how many SENIOR CITIZENS are being misled by financial institutions.. I am very glad that my brain is still in good shape otherwise I would be SOL courtesy of the banks/credit unions/financial instiutions...  The amount of bad information from them is phenomenal...

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Re: Banks mistakes in 401(K) to Roth IRA..?

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@peachykeen8 - Maybe we need to clarify .. are these "errors" simple mathematical ones, or a problem in communication as to what you want them to do?


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Re: Banks mistakes in 401(K) to Roth IRA..?

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ASTRAEA,   Thank you for response and info!!   I have changed banks/financial Institutions several times!!  Not investment/brokerage firms.  Part of the problem may be that I am withdrawing monthly and it is beginning to appear that the bank cultures want it all in one lump sum to investment accounts (hmmmm) so they are not motivated to ensure correct handling..(just imo at this stage)...I have found a bank that seems knowledgeable so far..(just changed banks).  Time will tell..It is to my advantage to withdraw monthly!   The brokerage firms that I have contacted appear to have no knowledge of monthly T to T...Thanks again for info!!

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Re: Banks mistakes in 401(K) to Roth IRA..?

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@peachykeen8 - I'm not sure why you're still at the same bank, if they've made so many large mistakes over the years .. I'd move my account elsewhere ASAP! I would also suggest you reach out to your state's banking & insurance department, about making a formal complaint about them. They may even have complaint forms online.

 

Over the 25+ years I've been with my bank & its predecessors, they've made & immediately corrected only a few small mistakes. My IRAs are with brokerage firms, and I've never caught any mistakes there.


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Re: Banks mistakes in 401(K) to Roth IRA..?

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@peachykeen8 wrote:

Has anyone encountered significant bank mistakes with Trustee To TrusteeTransfers of 401(K) to Roth IRA???  Since My bank (a large bank) has made huge mistakes repeatedly over many years, I am very concerned that the same thing is happening to other senior citizens (and their families) when the seniors are doing Trustee To Trustee Transfers of 401(K) to Roth (or even Traditional and possibly inherited IRAs)..  These bank mistakes have very serious consequences for the Senior citizens and their families!! 

e. g. The banks classify a T to T Transfer from 401(k) to IRA as a REGULAR CONTRIBUTION.  Thus far, I have been able to handle, correct, prevent these bank mistakes... But I am concerned that other senior citizens and their families are being given BAD INFORMATION by BANKS/FINANCIAL INSTITUTIONS and that the Seniors and their FAMILIES are NOT aware that their transactions are being mishandled and that their BANK/FINANCIAL INSTITUTION is giving them BAD INFORMATION!!  I am also concerned that at some time (inevitable) in the future, I will not be able to handle/correct/prevent these BANK/Financial Institution MISTAKES that my family will be burdened at a very vulnerable time in dealing with these BANKS/FINANCIAL INSTITUTIONS..  I want to know how prevalent these BANK MISTAKES (in T to T transfers to IRA) are!  I ALSO WANT TO POST THIS INFORMATION TO GIVE A "HEADS UP" WARNING TO SENIOR CITIZENS AND THEIR FAMILIES!!!    Please share your story if you or your family have encountered BANK/FINANCIAL INSTITUTION MISTAKES concerning T to T Transfers to IRAs!


I missed your post back in May on this subject.

 

If you are wanting to do a Roth Conversion with your 401K funds, you have to initially take the 401K funds and put them into a Traditional IRA account, which is a non-taxable event since you are just switching one tax deferred retirement plan to another ( 401K > Trad. IRA). 

 

IRS: Rollovers of Retirement Plan and IRA Distributions

 

Most any financial institution will set up the Trad IRA account and then there is no problem when you do the Trustee to Trustee transfer out of the 401K plan to the Trad IRA plan.

 

On the tax forms which you  receive as a result of the above (401K > Trad. IRA), yes the 401K funds will show as a regular distribution but you will have the documentation from the Trustee of the Trad. IRA showing the same amount as being contributed and thus will list this transaction on the front of IRS Tax form 1040 as rollover - see line 15a and 15b of form 1040.

 

AFTER the tax deferred funds are within the IRA account, you can then do a ROTH conversion if you like for all or part of the IRA amount but remember that any amount which you convert to a ROTH-IRA is TAXABLE in the year in which you do it and the tax documents from your Trustee will indicate the taxable amount.

 

Anything that goes into a ROTH IRA account is taxable -

* * * * * * It’s Always Something - Roseanne Rosannadanna
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Banks mistakes in 401(K) to Roth IRA..?

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Has anyone encountered significant bank mistakes with Trustee To TrusteeTransfers of 401(K) to Roth IRA???  Since My bank (a large bank) has made huge mistakes repeatedly over many years, I am very concerned that the same thing is happening to other senior citizens (and their families) when the seniors are doing Trustee To Trustee Transfers of 401(K) to Roth (or even Traditional and possibly inherited IRAs)..  These bank mistakes have very serious consequences for the Senior citizens and their families!! 

e. g. The banks classify a T to T Transfer from 401(k) to IRA as a REGULAR CONTRIBUTION.  Thus far, I have been able to handle, correct, prevent these bank mistakes... But I am concerned that other senior citizens and their families are being given BAD INFORMATION by BANKS/FINANCIAL INSTITUTIONS and that the Seniors and their FAMILIES are NOT aware that their transactions are being mishandled and that their BANK/FINANCIAL INSTITUTION is giving them BAD INFORMATION!!  I am also concerned that at some time (inevitable) in the future, I will not be able to handle/correct/prevent these BANK/Financial Institution MISTAKES that my family will be burdened at a very vulnerable time in dealing with these BANKS/FINANCIAL INSTITUTIONS..  I want to know how prevalent these BANK MISTAKES (in T to T transfers to IRA) are!  I ALSO WANT TO POST THIS INFORMATION TO GIVE A "HEADS UP" WARNING TO SENIOR CITIZENS AND THEIR FAMILIES!!!    Please share your story if you or your family have encountered BANK/FINANCIAL INSTITUTION MISTAKES concerning T to T Transfers to IRAs!

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