Comment by froindt | Hacker News Reader

Comment by froindt | Hacker News Reader

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>Well you can be fucked by your employers 401k manager. The day my wife quit, she was locked out of here 401k for 2 weeks. They divest everything during that term, and you have no control over the timing.

What type of a company did your wife work for? I actively learn about personal finance and retirement plans and have never heard of a lockout from a 401k.

> It's volatile enough presently that you could lose $$$ of they decide to sell at a low to boost their stock, and you can't re-invest in time.

Short of working for a privately traded company, or being a very well compensated executive, the shares owned by an individual employee are almost always negligible compared to daily traded volumes. "Selling at a low to boost their stock" wouldn't even move the needle.

Edit: One possibility came to mind after posting. Was your wife's 401k balance under $5,000? If so, the company can force liquidation. And to say doing so would help the stock price would only be meaningfully true on a penny stock.

No, $300k. She was locked out for 2 weeks as it was liquidated and a check cut to her IRA. Fortunately there was no volatility then.

My employer changed the 401k match (in company stock) to a single purchase in January. Of course you can sell immediately, but it has the effect of boosting the shares when you do it for over 100k employees.

Unfortunately the process to move money from a 401k to an IRA (and moving money in general in he US) isn't great. In many instances the check is sent to the individual who then needs to send it to the receiving institution.

I've also read that upon receiving the money, brokerages don't always show it to the end user right away, using it on their end for a few days (and at scale, that matters).

Fair point regarding the 401k match - but are they issuing new stock to complete the match? I haven't looked at how a match with company stock is funded before, but intuitively I'd think they'd issue new stock, diluting existing stock a tiny bit, but keeping the same overall company valuation.

As originally presented I saw the issue with your wife's 401k and padding the stock price as part of the same issue.

I’m not the OP, but when I left a company where I had a 401(k) and transferred the balance to my preferred brokerage, the source account was frozen for about that long during the approval and transfer process.

Yes, and I assume they cut a check to your IRA?

Yes, but the longest part of the process was waiting for the 401(k) administrator to actually do that, and once I initiated the process I couldn’t make any changes. This was a while ago so I don’t remember the specific time frames, but it was somewhere between 10–15 business days for the 401(k) to show a zero balance, then 3–5 business days after that for the money to show up in my IRA. I had no control over when something would happen during this process.

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