When you quit a job, what happens to your 401(k) plan? If left to its own devices, the account could result in money being lost over time. If you’ve worked many jobs, you’ve undoubtedly got multiple 401(k) accounts that are losing money. This is when Capitalize enters the picture.
The program locates 401(k) funds that have been misplaced, establishes individual retirement accounts (IRAs), and consolidates retirement accounts.
What is Capitalize?
A 401(k) rollover service that can assist you in transferring funds from an old 401(k) to a new retirement account (IRA). The program is for persons who have 401(k) accounts from previous employers.
For years, these accounts could stay dormant, amassing fees and losing money. Capitalize helps you transfer your funds to an account that you can access at any time, such as a checking account.
Capitalize recommends opening an IRA with one of its partner platforms, such as Betterment, SoFi, or TD Ameritrade, if you don’t already have one. If you already have an IRA, all you have to do is link it, and Capitalize will take care of the rest. And the registration takes only a few minutes.
Features
Capitalize allows you to move money from one 401(k) to another. It’s for people who had 401(k)s from previous companies. For the many parts, these accounts lay dormant for years, accumulating fees and losing money. Capitalize will place your money into an account that you may access at any time, such as an IRA, to avoid this.
How does it work?
Here’s what you should expect from the Capitalize rollover:
- Find your 401(k) plan. If you know where your former 401(k) account is, that’s fantastic! If not, Capitalize may help you find it using its database. If that fails, its team will look into the account on your behalf.
- Select an IRA service provider. Capitalize compares the prices and features of various platforms to help you choose the best one for your new IRA.
- Create an Individual Retirement Account (IRA). Fill out an account application with the service provider of your choosing. If you already have an IRA, now is the time to link the two accounts.
- Invest in a 401(k) plan. Your old 401(k) funds are moved to your new IRA. Capitalize completely handles the final stage in the rollover procedure.
How do you sign up?
The Capitalize registration process begins on the homepage:
- Choose to Get Started.
- Tell Capitalize which provider manages your prior 401(k), or use the finder tool to look up your previous employer by name.
- Choose, you want to start a new IRA or roll your old 401(k) into one that already exists.
- Select your IRA provider from the drop-down menu or select Help me choose.
- Select Next after answering a few questions about your assets and preferences, including how much money is in your former 401(k).
- If you don’t already have an IRA, look over Capitalize’s possibilities and pick a provider.
- Create a password and enter your email address.
- Examine the User Agreement, Terms & Conditions, E-Sign Agreement, and Privacy Policy for Capitalize. Next should be selected.
- Enter the code provided in your inbox to confirm your email address.
- Complete the process of opening an IRA account with the provider you chose.
- Authorize your previous 401(k) rollover into your new account by entering your IRA account number.
Cost
The 401(k) rollover service provided by Capitalize is entirely free. It doesn’t have a premium service tier, and you can use it as many times as you like.
There might be fees associated with the IRA you open during the rollover procedure, but these are the responsibility of the IRA provider, not Capitalize.
Is it trustworthy?
Because Capitalize has no Better Business Bureau (BBB) website or parent firm, it isn’t easy to assess its validity. It is not a member of FINRA or SIPC, and its website declares that it is not qualified to provide financial or tax advice. Its founders have worked in investment banking for prominent financial firms such as J.P. Morgan and Morgan Stanley, but they don’t appear to be licensed financial advisors.
Customer response has been positive, and Capitalize does not hold your funds; it merely assists with the rollover procedure. You will lose nothing because you aren’t paying for the service. Still, given the absence of overall feedback on the platform, you should read Capitalize’s Terms and Conditions carefully before signing up.
Pros and cons
How does it make a profit?
Capitalize has partnerships with the IRA providers that it recommends on its website. Capitalize receives a referral fee if you open an account with one of its partners.
Complaints and Reviews
Overall, the reception on Capitalize has been excellent. It does not have a BBB page, but as of October 2020, it has a TrustScore of 4.8 based on 23 user ratings. Capitalize has received 0 complaints from the Consumer Financial Protection Bureau.
There aren’t many consumer experiences to draw upon except feedback left for Capitalize on Trustpilot, and there aren’t any Reddit posts about the service. However, the platform’s high Trustpilot rating is optimistic, as evidenced by customer testimonials of concierge-like service and knowledgeable, courteous corporate representatives.
Final thoughts
Although Capitalize’s 401(k) rollover service is free and straightforward to use, the company is still relatively new, and there is little customer feedback to analyze. The partners of Capitalize are well-known in the business.
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FAQ
What is Capitalize?
A 401(k) rollover service that can assist you in transferring funds from an old 401(k) to a new retirement account (IRA). The program is for persons who have 401(k) accounts from previous employers.