401K Question

[JG EA]

I'm trying to figure out what happened without calling the employer or broker (yet).

Employer opened a 401k for employees. Nothing was on the W-2 of my client. My client did not make any contributions to anything.

Then client received a Trade Comfirmation as an Interested Party showing a sale of everything.

Then at work client was given a paper to sign to have his 100% put into another broker's account. (American Funds). The box is marked Funds are to be distributed to an IRA or other qualified plan.

Another page has Roth circled. Another page has 401k checked but not Roth 401k.

Any ideas about what kind of account this is now and what it will mean to my client if he takes any of it out?

[ChEAr$]

What are they trying to pull?

I'm trying to figure out what happened without calling the employer or broker (yet).

Employer opened a 401k for employees. Nothing was on the W-2 of my client. My client did not make any contributions to anything.

Then client received a Trade Comfirmation as an Interested Party showing a sale of everything.

Then at work client was given a paper to sign to have his 100% put into another broker's account. (American Funds). The box is marked Funds are to be distributed to an IRA or other qualified plan.

Another page has Roth circled. Another page has 401k checked but not Roth 401k.

Any ideas about what kind of account this is now and what it will mean to my client if he takes any of it out?

Client evidently doesn't know what's happening. He must have some paperwork somewhere
when he signed up for the plan originally.
But it sounds like employer has terminated the plan. (Perhaps due to economic downturn?)
Why would "ROTH' be circuled, as if employer is making a choice for employee?

No, I think employee needs much better clarification from the employer. Remember, it's not
you job to get it. Just as it's not our job to seek out and determine basis of stock sold when
all client has is the 1099B! Know what I mean?

[JG EA]

Thanks for your reply. I was concerned about asking a question when I should know the answer. But, since two different things are circled I think that is reason enough to call and find out what happened. And yes, it was a close out by the employer. I should have mentioned that to make the post clearer.

I know the client has a Roth and I was thinking the money went there, but that couldn't be possible if it was a 401k, at least I don't think so.

[erchess]

Harlan, why

Client evidently doesn't know what's happening. He must have some paperwork somewhere
when he signed up for the plan originally.
But it sounds like employer has terminated the plan. (Perhaps due to economic downturn?)
Why would "ROTH' be circuled, as if employer is making a choice for employee?

No, I think employee needs much better clarification from the employer. Remember, it's not
you job to get it. Just as it's not our job to seek out and determine basis of stock sold when
all client has is the 1099B! Know what I mean?

won't you help a client get information provided he or she pays you for your time? Are you really so busy with clients who can gather all their info without your help that assisting those who need hand holding would require you to work more than you want to or else turn away some of the more self reliant clients? I have people who could no more take a question to their broker and bring me an answer (unless I wrote out question and broker wrote out answer) than they could flap their arms and fly. Of course there is an extra charge and of course I itemize it on the bill. I charge extra for sorting through their records as well but many bring me shopping bags of receipts stapled to hand written notes about what the purchase was for and why in their mind it should be deductible. One client I worked with ages ago about doubled the cost of my services by his bad records the first year. The second year he used the experience of watching me organize things and he saved himself some money. The third year he had things so well organized that I did not feel the need to charge for going through his stuff. I don't know but I like going the extra mile with my customer service but my fees do reflect the time I put in.

[ChEAr$]

erchess,

I'm not saying I never will (after all, like James Bond: Never say never!)

What I'm trying to do is make clients self reliant and therefore understand the ramifications of
stock sales. too many times, like TODAY, the wife sold company stock she had been buying
from the company bi weekly. She said "Well I put that paperwork in the "stuff" I sent you.
Sure, the paperwork was simply the 1099B showing 2800$ gross proceeds, Somehow I can't
get through to her that she either pays tax on the 2800$ (short term by default), OR she comes up
with the records easily obtainable from her employer. After all, AFLAC (think duck!) has a
superb investor relations department.

But IF I have to reconstruct records, like I did recently, it's per hour added to the bill.

[ChEAr$]

sure it's possible

Thanks for your reply. I was concerned about asking a question when I should know the answer. But, since two different things are circled I think that is reason enough to call and find out what happened. And yes, it was a close out by the employer. I should have mentioned that to make the post clearer.

I know the client has a Roth and I was thinking the money went there, but that couldn't be possible if it was a 401k, at least I don't think so.

for such a rollover to a ROTH, but what are the implications? TAxable of course. No, advise
client to roll it over into a regular IRA first and go from there. Maybe he won't be needing the
money to pay rent or buy gas or groceries.

see my point?

[erchess]

Harlan,

maybe I am more of a mollycoddling mother hen than I should be, but I enjoy doing things for my clients that they could do for themselves because I enjoy the larger paycheck at the end of the job. Anyway, thank you for answering my question.