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Taking Control of a 401(k)

Saving the day by taking effectively control of assets


The challenge

A new company was established after a few of the founders separated from a different firm. The members of the new firm has substantial assets in their 401(k) accounts. The members wanted to continue to contribute to a 401(k) and move their assets from their previous firm.

The challenge was that the previous firm was no longer active and there was no trustee over the 401(k) making it difficult to transfer the assets.


What we did

An internal group within our firm has handled employee benefit plans such as health insurance and retirement plans for the past 30 years. We put them on the case. Initially, we looked at several different 401(k) providers and compared services, fees, and investment options. We presented three finalists to the new company and went over the advantages and disadvantages of each. With our recommendation, they selected the low-cost provider Vanguard as their provider because of their minimal fees and passive index investment options. We also recommended Vanguard for this client because some of the employees could benefit from a Roth 401(k) option rather than the traditional 401(k) option. We set up a Roth 401(k) option concurrently with the traditional plan and gave employees the option of doing either/both depending on their income and tax rate. We also contacted the existing custodian of their 401(k) account and record keeper and are in the process of transferring their previous 401(k) balances to their new Vanguard 401(k)



The outcome

  • Established a low-cost 401(k) retirement plan for employees and owners.
  • Added a Roth 401(k) option to allow lower income earning employees who didn’t need the tax deduction a chance to save for retirement with a Roth and never having to pay tax on the gains or when money is taken out of the account.
  • Created a plan to move locked up assets in the founder’s previous 401(k) to their new 401(k).


These examples are for illustrative purposes only. Any strategies referenced herein do not take into account the investment objectives, financial situation, or particular needs of any individual. They should not be considered individual advice, suitability must be independently determined. Individual results will vary and may be more or less favorable than in the examples shown.

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