I Received a Huge Check and I’m Mad About It

[Music] brought to you by the Ramsey Network app download today to go further with Ramsay so I have a bit of a problem I never thought this was going to happen so uh in 2018 my father passed away and he left me and my brother a 401k plan uh fast forward five years uh I got a check in the mail this morning uh for about 245,000 the original account balance was about 300,000 and what's happening is they gave me the check and I have to pay the IRS that 55,000 difference from the 300,000 245 I called them and asked them if they could roll it over and they said once they issued the check there's nothing that can be done who told them to issue the check not me apparently uh the the company my father I didn't either didn't read I'm sorry I didn't I didn't hear you you cut out apparently your father worked for what yeah they um they have a 5e plan I guess for the death benefit that if it's not rolled over to something else within five years they must close the account and just issue a checkout it it's super confusing the way they explained it to me I was on the phone with them for an hour and a half this morning with uh my 401k uh company and they pretty much said once we issue the check there's nothing that can be done there was no work around yeah there is they had they until just that's what I'm saying you don't I'm sure you don't have an extra 55 grand laying around no so the way it worked is my account balance was 300,000 it started at like 215 and over the years I got it up to 300 they issued me a check for 245 they already took the money out and sent it to the IRS and issued me the difference yeah they have to withhold 20% that's the rule if you if you take withdrawal but this is an involuntary withdrawal without no without any contact to you or anything which is completely a minimum unprofessional what caused you to wait what caused you to wait the 5 years as opposed to Rolling it over because the 401K plan my father was invested in had really good options like I built up all of those same options exist in the open market yeah and I I have my own personal investment accounts and I do it with that as well the you know if you know Don't Rock the Boat if the boat shouldn't be rocked so the way I figured is the 401 k plan was perfectly fine I kept it in there just because the investment options were fine it was just it's a retirement account I was treating it like a retirement account I wasn't going to touch it till I was 65 I'm 30 now yeah what do you make there was uh I make uh I'm a truck driver so I make about 110,000 a year and I also own a small business that I make about the same so okay under the secure act that Biden passed you have 10 years to liquidate the 401K completely you should have been liquidating it um at 1110th a year from the time the secure Act passed two years ago and you've not been doing that so um I didn't know about that I know um the uh so I'm I'm trying to figure out how that plays into this and how hardcore all right let's pretend that we figure out a way to lean on them and they cancel the check and put the money back into the 401K so that you can roll it over within 30 days which is what they should do if they're uh are people of Integrity this is a problem it's not technically unethical it's just so nasty that it ought to be unethical uh what theyve done it's a big cost a lot of money it's going to cost you it's going to cost you um you know 20 30,000 bucks and that you don't have it cost me two years it cost me two whole years of of gains because of this I never thought I would be upset to get a huge check in the mail but I did and I'm upset because I should have had it rolled over it should have been hug he should have called me yeah all right so here's here's here's what I'm going to suggest you do and I don't think it'll work but it's the only thing I can think of all right okay go to Ramsey solutions.com and click on smartvestor and find a smartvestor pro in your area that you like after talking to them on the phone they may be able to call on your behalf and uh talk them into undoing this and immediately rolling it and they'll help you with the roll over okay they may be able to site uh something that a regulation or something that I'm not aware of um because this is uh when you started talking I thought you were going to tell me this was a tiny little 401k like a $10,000 and they were just cleaning out all the little ones sometimes they do that when a company sells or in the event of an inherited 401k like you've got um but this is huge this is a lot of money and so this is part and with no notification at all this is particularly nasty and so if they had simply notified you you could have quickly rolled it over and avoided this right and they said they notified me but I I wait a minute you're a truck you're a truck r you didn't they did notify you my accounts they said they did but I never got any notification so you've never seen evly yeah ask ask them to prove that they ask them to prove that they did okay okay so idea I mean I don't I don't think you've got a basis for suing them but I'd be tempted to I really would I mean because you're talking about 25 or $30,000 cost here that is unnecessary 55,000 they took out they theyy 50 it's the taxes on 55,000 the 55,000 is going to be taxed not penalized no no they when I got my uh experment uh like the summary of what my original account balance was 300,000 they C me a check for 245 I understand they took 55,000 they sent it to the federal government as tax withholding and it's not all taxable so the because the entire because you're going to roll the rest of this if you take the check in your hand and you roll it to a 401k the only harm that's going to come to you is the taxes on the 55,000 which is going to be 15 grand or 20 grand oh so I'm GNA have to pay another 15 grand honey you haven't paid anything yet okay they withheld your money 55,000 and sent it to the federal government then what you do is you file a tax return of what is actually due and what be actually due is not 55,000 it'll only be the taxes on 55,000 if you take the check in your hand and put it into an IRA traditional within 60 days of right now so you need to get on the phone with a smart Vestor Pro right now because at least we need to do that okay I will but the so the worst case scenario if you follow through on what I just told you is taxes on $55,000 cuz the government has 55,000 of your money as if you're going to get taxed on the whole thing and you're not okay because you're going to roll the portion in your hand which is 80% of it into a traditional to keep you from getting tax you got 60 days to do that from the time withdrawal so folks you can pull your money out of 401k they have to withhold 20% but you have to put 100% into an account within 60 days to avoid taxation that's what the problem because they can't do that because they got 55 of his money over at the IRS now and so if you just take the take the 55 then you're going to pay some taxes but not 55 so there we go brought to you by the Ramsey Network app download today to go further with Ramsey