Why can't 401(k) statements be delivered electronically?
"There are a lot of unintended consequences of fairly arbitrary IRS guidelines when it comes to 401Ks, they both close and create tons of loopholes and many companies are left to implement their own policy around these laws. Ultimately what you are left with are a lot of random things, interpreted differently by every single company in the country, that aren't directly codified by the IRS or Congress. If you have a choice regarding what brokerage firm manages your 401(k), then just call around. Be sure to ask the pencil pusher on the phone to double check because they might say ""OF COURSE you can get paperless statements it is 2015"" but then when you sign up it becomes ""ooohhh sorry due to recent guidelines this kind of account isn't eligible for paperless statements""" "Glad my question got bumped. I took it as a sign to get a solid answer out of Schwab. First the rep gave me the same line that it was impossible to provide paperless statements for a 401(k) plan because of ""regulations"". I pressed the issue and got this from the rep: I just spoke with our dedicated small business plan team. They told me   that there are regulations that state that a Qualified Plan, such as   this, require to have a statement sent. It is a Schwab policy that we   have decided to only allow paper statements for this account type. So to clarify, it is a Schwab business decision to have the statements   available only by mail. Hope someone from Schwab with some authority sees this post and is pushed toward helping change their policy. I can't imagine what a colossal waste of paper, postage, and hassle it is for everyone involved."
"To answer, I'm going to make a few assumptions. First, the ideal scenario for a pre-tax 401(k) is the deposit goes in at a 25% tax rate (i.e. the employee is in that bracket) but withdrawn at 15%. This may be true for many, but not all. It's to illustrate a point.  The SPY (S&P 500 index ETF) has a cost of .09% per year. If your 401(k) fees are anywhere near 1% per year total, over 10 years you've paid nearly 10% in fees, vs less than 1% for the ETF. Above, I suggest the ideal is that the 401(k) saves you 10% on your taxes, but if you pay 10% over the decade, the benefit is completely negated.  I can add to the above that funds outside the retirement accounts give off dividends which are tax favored, and if you were to sell ETFs held over a year, they receive favorable cap-gains rates.  The ""deposit to get the matching funds"" should always be good advice, it would take many years of high fees to destroy that. But even that seemingly reasonable 1% fee can make any other deposits a bad approach.  Keep in mind, when retired you will have a zero bracket (in 2011, the combined standard deduction and exemption) adding to $9500, as well as a 10% bracket (the next $8500), so having some pretax money to take advantage of those brackets will help. Last, the average person changes jobs now and then. The ability to transfer the funds from the (bad) 401(k) to an IRA where you can control the investments is an option I'd not ignore in the analysis.  I arbitrarily picked 1% to illustrate my thoughts. The same math will show a long time employee will get hurt by even .5%/yr if enough time passes. What are the fees in your 401(k)?   Edit - Study of 401(k) fees - put out by the Dept of Labor. Unfortunately, it's over 10 years old, but it speaks to my point. Back then, even a 2000 participant plan with $60M in assets had 110 basis points (this is 1.1%) in fees on average. Whatever the distribution is, those above this average shouldn't even participate in their plans (except for matching) and those on the other side should look at their expenses. As Radix07 points out below, yes, for those just shy of retirement, the fee has less impact, and of course, they have a better idea if they will retire in a lower bracket. Those who have some catching up to do, may benefit despite the fees." "The ""must be postmarked"" language might be just from the old bank itself, not from the IRS.  The language I see in Publication 969 only says ""You can make contributions to your HSA for 2014 until April 15, 2015."" In this case, it is understandable that the credit union you have the new account with does not want to accept the contribution for tax year 2014.  You didn't have an account with them in 2014.  You didn't even send out the paperwork to them to open the account until last week, and they didn't open your account until this week, after the deadline. It is unfortunate, but I don't think you'll be able to force them to do anything differently here.  It is just too late. I do know how that feels.  I had a somewhat similar circumstance with my HSA, the first year I had the account.  I contributed money to the HSA using my credit union's website, transferring money from my checking account into my HSA, as I was told to do.  In January and February of the following year, I made more contributions this way, thinking that I was making them for the previous tax year.  However, they never got coded correctly by the credit union, and I later found out that the credit union counted those as contributions for the current year.  As a result, I was essentially denied the full contribution limit for that year, and had a bit of a paperwork nightmare.  Now, if I have to make a prior year contribution, I only make it in person, and they have a form they have me fill out each time I do." "It becomes ""yours"" when it leaves the trust. Until that point the Trust owns the shares attributable to your account. There are some different arrangements out there, in the cases of some of the smaller 401(k) providers, where the assets are held in annuity products, or even individual annuities in the case of 403(b) plans.  To further answer the question, the trust and  trustee own and hold the account before you take a distribution. In a lot of cases the 401(k) recordkeeper has a trust company that they use to serve as the custodian (person or entity who retains the assets). In some plans you have an individual Trustee or a Corporate Trustee. Those setups are not good for that person or company because they are ultimately responsible for backing the assets in the plan, and as you can imagine, leaving that responsibility to one person is not safe for that individual.  Hope that helps, glad to answer any other questions you have!" I got notice from Charles Schwab that the forms weren't being mailed out until the middle of February because, for some reason, the forms were likely to change and rather than mail them out twice, they mailed them out once. Perhaps some state tax laws took effect (such as two Oregon bills regarding tax rates for higher incomes) and they waited on that. While I haven't gotten my forms mailed to me yet, I did go online and get the electronic copies that allowed me to finish my taxes already. For this rollover, there are no restrictions of age/income/etc.  You need to know - the transfer must be direct, i.e. if you get a physical check, it should be payable not to you, but to the new custodian (broker) for your benefit. Direct is preferable and faster. The assets may not be transferable 'in kind.' This phrase simply means that you may move the value, but if the assets are not shares that are held by the public, but special 401(k) class shares, they must be liquidated before moving, and moved as cash. This is a risk people with large accounts take should the market move dramatically during the time they are liquidated, and why, for them, I suggest doing it piecemeal. "You mean ""I don't understand why someone would sign a contract expecting the employer to observe it""?   Pensions are contractual obligations. It's only the massive mismanagement, lack of fiscal responsibility, and evisceration of employee bargaining power that puts us in a position to think that employers wouldn't observe their contractual obligations.   I mean, if this were the mortgage market, you would be arguing to banks ""What the hell made you think this homeowner would keep paying you 6% interest on this money when you're not providing any kind of value twenty years later?""" "This article fails to explain that paper gold doesn't ""necessarily"" guarantee the owner to physical gold.  An index fund tracking the price of gold per ounce guarantees the owner the market value of gold at the termination of the contract.  This keeps markets liquid, and allows investors to diversify into precious metals without the inconvenience of storage and delivery fees.  As long as we are using currency that can be exchanged for gold this shouldn't pose a problem.  If we move to a post currency world of barter and trade, you're better invested in weapons and ammunition." It is typically very easy to roll a 401(k) into an IRA.  Companies that provide IRA's are very experienced with it, and I would expect that they will take your calls from overseas. You will likely be able to do it over the internet without using a phone at all. Just open an IRA with any brokerage company (Scottrade, Vanguard, Fidelity, Schwab, Ameritrade, etc.) and follow instructions to roll your 401(k) into it.  Most likely they will need your signature, but usually a scan of a form you have filled out will do.  Be sure to have information on your 401(k) provider, including your account number there, on hand.  These companies are all very reputable and this is not a difficult transaction. There's really no downside to rolling into an IRA.  401(k) plans usually have more limited options and/or worse fee structures and are frequently harder to work with, as you have observed. The 401(k) contribution is Federal tax free, when you make the contribution, and most likely State too.  I believe that is true for California, specifically. There was a court case some years ago about people making 401(k) or IRA contributions in New York, avoiding the New York state income tax.  Then they moved to Florida (no income tax), and took the money out.  New York sued, saying they had to pay the New York income tax that had been deferred, but the court said no.  So you should be able to avoid California state income tax, and then later if you were to move to, for example, Texas (no income tax), have no state income tax liability. At the Federal level, you will have different problems.  You won't have the money; it will be held by the 401(k) trustee.  When you try to access the money (cash the account out), you will have to pay the deferred taxes.  Effectively, when you remove the money it becomes income in the year it is removed. You can take the money out at any time, but if you are less than 59 1/2 at the time that you take it, there is a 10% penalty.  The agreement is that the Feds let you defer paying the tax because it is going to finance your retirement, and they will tax it later.  If you take it out before 59 1/2, they figure you are not retired yet, and are breaking your part of the agreement. Of course you can generally leave the money in the 401(k) plan with your old employer and let it grow until you are 59.5, or roll it over into another 401(k) with a new employer (if they let you), or into an IRA.  But if you have returned to your own country, having an account in the U.S. would introduce both investment risk and currency risk. If you are in another country when you want the money, the question would be where your U.S. residence would be.  If you live in California, then go to, say France, your U.S. residence would still be California, and you would still owe California income tax.  If you move from California to Texas and then to France, your U.S. residence would be Texas.   This is pretty vague, as you might have heard in the Rahm Emanual case -- was he a resident of Chicago or Washington, D.C.?  Same problem with Howard Hughes who was born in Texas, but then spent most his life in California, then to Nevada, then to Nicaragua, and the Bahamas.  When he died Texas, California and Nevada all claimed him as a resident, for estate taxes.  The important thing is to be able to make a reasonable case that you are a resident of where ever you want to be -- driver's license, mailing address, living quarters, and so on. "The simplest answer to why you can't see it in your online statement is a design/business decision that was made, most probably originally to make online statements differ as little as possible from old fashioned monthly printed statements; the old printed statements never showed holds either. Some banks and card services actually do show these transactions online, but in my experience these are the rare exceptions - though with business/commercial accounts I saw this more, but it was still rare. This is also partly due to banks fearing lots of annoying phone calls from customers and problems with merchants, as people react to ""hey, renting that car didn't cost $500!"" and don't realize that the hold is often higher than the transaction amount and will be justified in a few days (or weeks...), etc - so please don't dispute the charges just yet. Behind the scenes, I've had bankers explain it to me thusly (the practice has bitten me before and it bothered me a lot, so I've talked to quite a few bankers about this): There are two kinds of holds: ""soft holds"" and ""hard holds"". In a soft hold, a merchant basically asks the bank, ""Hey, is there at least $75 in this account?"" The bank responds, and then has it's own individually set policy per account type as to how to treat that hold. Sometimes they reserve no money whatsoever - you are free to spend that money right out and rack up NSF fees to your heart's content. Yet some policies are to treat this identically to a hard hold and keep the money locked down until released. The hard hold is treated very much like an actual expenditure transaction, in that the money is locked and shown as no longer available to you. This varies by bank - some banks use an ""Account Balance"" and an ""Available Balance"", and some have done away with these dual terms and leave it up to you to determine what your balance is and what's ""available"" (or you have to call them). The key difference in the hard hold and a real expenditure is, technically, the money is still in your bank account; your bank has merely ""reserved"" it, earmarking it for a specific purchase (and gently promising the merchant they can have their money later), but the biggest difference is there is a time-limit. If a merchant does not process a completion to the transaction to claim the money, your bank will lift the hold after a period of time (I've seen 7-30 days as typical in the US, again varying by institution) returning your money to your balance that is available for purchasing and withdrawal. In every case, any vaguely decent banking institution allows you to call them, speak to some bank employee, and they can look up your account and inform you about the different sort of holds that are on your account that are not pending/completed purchase transactions. From a strictly cynical (perhaps rightly jaded) point of view, yes this is also used as a method to extort absurdly high fees especially from customers who keep a low balance in their account. I have had more than one bank charge NSF fees based on available balances that were due to holds made by gas pumps, for instance, even though my actual ""money in my account"" never went below $0 (the holds were for amounts larger than the actual transaction). And yes, the banks usually would waive those fees if you bothered to get someone on the phone or in person and made yourself a nuisance to the right person for long enough, but they made you work for it. But I digress.... The reality is that there are lots of back and forth and middle-men in transactions like this, and most banks try to hide as much of this from you the client as possible, partly because its a huge confusing hassle and its part of why you are paying a bank to handle this nonsense for you to start with.  And, as with all institutions, rules and policies become easily adjusted to maximize revenues, and if you don't keep sizable liquid minimum balances (100% of the time, all year long) they target you for fees.  To avoid this without having fat wads of extra cash in those accounts, is use an entirely disconnected credit card for reservations ONLY - especially when you are traveling and will be making rentals and booking hotels. Just tell them you wish to pay with a different card when you are done, and most merchants can do this without hassle. Since it's a credit card with monthly billing you can often end up with no balance, no waiting around for a month for payments to clear, and no bank fees! It isn't 100%, but now I never - if I can possibly avoid it - use my debit/bank card to ""reserve"" or ""rent"" anything, ever." "Is it really all that much for me to ask that exchanges not be complicit in my 401k being front-run? I really don't get how you can argue it's a good thing. I guess I should instead be mad at the my 401k management firm for not dragging their own private fiber networks and allowing my 401k to get shaved by ""smarter"" traders that do. You're ridiculous." OK, so first of all, employers don't set up IRAs.  IRA stands for Individual Retirement Account.  You can set up a personal IRA for yourself, but not for employees.  If that is what you're after, then just set one up for yourself - no special rules there for self employment. As far as setting up a 401(k), I'd suggest checking with benefits management companies.  If you're small, you probably don't have an HR department, so managing a 401(k) yourself would likely be overly burdensome.  Outsourcing this to a company which handles HR for you (maybe running payroll, etc. also), would be the best option.  Barring that, I'd try calling a large financial institution (Schwab, Fidelity, etc.) for clear guidance. "For 401(k) and regular IRA, you pay income tax on withdrawals from the account. At a certain age, there is a ""required minimum distribution"". This is an amount you must withdraw from the account or you face penalties. I've also read about, but am not familiar with, mechanisms by which you can retire early and start taking withdrawals before the regular official retirement age. (These may or may not be legit, I didn't do any research on it.) A Roth IRA, which is not ""tax deferred"" and thus not technically covered by your question, there is no tax on withdrawals (assuming you are at retirement age) and no required minimum distribution. Something to watch out for on your accounts are fees that they charge for withdrawals. I was in a 401(k) once that had a $50 fee per-withdrawal. A monthly check from this account would eat your money! I paid the fee once, when I rolled it into an account at a brokerage after leaving the company." Not really practical... The real problem is getting the money into a form where you *can* invest it in something.  It's not like E\*Trade will let you FedEx them a briefcase of sequentially numbered hundreds and just credit your account, no questions asked.  That **is** the hard part. Nice idea. When I started my IRAs, I considered this as well, and the answer from the broker was that this was not permitted. And, aside from transfers from other IRAs or retirement accounts, you can't 'deposit' shares to the IRA, only cash.