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What is Capitalize?
Capitalize is a fintech company founded by Gaurav Sharma (CEO of Capitalize). Capitalize is an online platform that assists people with rolling over their old retirement account, or in the process of 401(k) roll over. Oh, and one other small detail – it’s a free service!
I had heard about Capitalize right around the time I was getting a new job. After doing some research on what makes their service great, I decided to partner up with them. But before I endorsed their service I wanted to make sure that I believed in it and had personal experience myself – so I decided to try it out.
Why I Tried Capitalize
Last year, I started a new job. I had a 401(k) at that old job with my old employer that I needed to roll over. I knew I didn’t want to roll over my 401(k) (my old plan) by myself because I’d already done that once before and it was a huge hassle, so I decided to use the rollover service of Capitalize instead.
Here are some pros and cons that I experienced while using Capitalize.
This post is all about the pros and cons of Capitalize’s 401(k) roll over process.
PRO: User Interface/Ease of Use
When you first go to Capitalize’s website, you’ll click their “Get Started” button to begin the roll over process. Then, the website will take you through a series of questions to locate your 401(k) with your former employer, even if you’re not exactly sure where it is.
The Capitalize website will then ask you for your existing IRA details (if you have one) so that they can roll your 401(k) into it OR assist you in opening a new IRA account if you don’t already have one.
Not only did I find the Capitalize platform very straightforward and easy to use, but this piece of the process took about 15 minutes in total. It was very quick and easy to follow.
I didn’t have to open a new IRA at the time (more on this later) so the process was pretty quick for me. But if you had to open a new account with a new IRA provider, the whole process would’ve taken about 5-10 minutes more – nothing burdensome.
The Capitalize website will tell you exactly what you need to do to open a new IRA. So, if you’ve never opened one before, don’t worry. The Capitalize website will guide you.
All in all, the Capitalize website makes rolling over your 401(k) / old retirement plan far less intimidating and much more simple.
CON: Capitalize can only help you if you want to roll over your 401(k)/403(b)/etc. into an IRA
If you plan on leaving your old 401(k) account(s) with past employers or rolling it into your 401(k) with your new employer, you don’t need to use Capitalize. Capitalize strictly assists those who want to roll over their 401(k)s, 403(b)s, 401(a)s, 457s, or TSPs into an IRA.
If you want to do a direct rollover of your old 401(k) to your new employer’s plan, you can discuss that with your new employer.
Not sure if you want to roll your 401(k) into an IRA? Here are a few reasons from Capitalize on why rolling your old 401(k) into an IRA is beneficial:
- Save money. The average person can save $700,000 over their lifetime by rolling over a high-fee, poorly allocated 401(k) into a low-fee, well-allocated IRA.
- Easy to manage. An IRA gives you a place to consolidate your retirement savings every time you change jobs. For the average person, that’s 12 times over the course of their career.
- Take control of your retirement. Your 401(k) is managed by your employer, which means you lose the ability to contribute when you leave your job. It can even be transferred without your consent. Rolling your old 401(k) funds into an IRA ensures that you control where and how you invest your savings.
- Access more investment options. Your 401(k) investment account is limited to the investing style and asset classes chosen by your employer. Unlock more choices with an IRA, including robo advisors, ETFs, and alternative investments like real estate and crypto.
PRO: Capitalize does EVERYTHING for you
I talk about this in my post that goes into detail about how to roll over your old 401(k) with Capitalize, but as someone who has actually rolled over an old 401(k) by myself before, I can’t express enough how much easier the roll over process is with Capitalize.
When I rolled over an old 401(k) on my own years ago, I spent so much time on the phone, asking questions, and filling out paperwork. I also went through the entire process with a lot of uncertainty because I didn’t have any one by my side to make sure that I was doing everything correctly.
But with Capitalize? They do it ALL for you, and a Capitalize representative is just an email away to answer any questions that you may have.
Click here to roll over your old 401(k) for free with Capitalize:
CON: Had to wait a while for my call with Capitalize and my 401(k) provider
After giving Capitalize all of my 401(k) and IRA information, I had to schedule an appointment with Capitalize and my old 401(k) provider to authorize the rollover. Not everyone has to do this, but my brokerage firm required it.
To set up this authorization, Capitalize gave me a calendar from which I had to choose a time that was most convenient for me. Unfortunately, Capitalize didn’t have a next available time until about a month out.
I was really surprised to see this, and actually thought it might be an error at first.
I emailed Capitalize to ask them if I really couldn’t schedule my call to authorize my rollover for more than a month. I received a response from a Capitalize rep with an apology, and she said that scheduling availability has become more limited because of a big jump in demand for their product.
She assured me that they were well aware of this and that they were working hard to increase scheduling availability.
Luckily, I wasn’t in any sort of rush to roll over my old 401(k), so to wait a month wasn’t bothersome for me.
PRO: Capitalize is FREE
If you choose to open up an IRA with one of the providers on the Capitalize website, then Capitalize may be compensated by the IRA provider that you choose. This way, Capitalize can keep their service free for users.
Some people think this sounds too good to be true, but it is true! Capitalize is completely free. No high fees here!
CON: Lots of emails
I received 17 emails from Capitalize from the beginning of the rollover process to the end of it. Granted, quite a few of those emails were follow up emails reminding me to book my authorization appointment which I took a few days to do haha.
The emails were something that I noticed, but may not be a big deal to you!
PRO: The Capitalize representatives are knowledgeable
After a little over a month, I was about to have my scheduled call with Capitalize to authorize my roll over. I was really interested to see how this would play out because I actually had quite an interesting 401(k) situation, and I wasn’t sure if Capitalize was going to be able to help me navigate it or not.
It was almost like I was testing Capitalize haha.
Basically, my 401(k) at my old company was a mix of pre-tax contributions and post-tax contributions. That meant that I would have to roll over the portion of my old 401(k) that consisted of pre-tax contributions into a traditional IRA, and the portion of my old 401(k) that consisted of post-tax contributions into a Roth IRA.
I already had a Roth IRA… but not a traditional IRA.
When the Capitalize representative called me for my appointment, it was just us two on the phone. As we got talking, he asked me, “Do you have a traditional IRA? It looks like you have some pre-tax contributions in your 401(k) that will have to go into a traditional IRA”.
I told him that I did not have a traditional IRA and we ended up opening one up together, which took no more than 3 minutes.
To know that the Capitalize representative knew how to handle my 401(k) rollover was a relief. This gave me so much peace of mind. My trust in him and the Capitalize process in general increased at this point.
Click here to roll over your old 401(k) for free with Capitalize:
PRO: Great customer service
After I opened up my new, traditional IRA, my Capitalize rep told me that he was going to call my brokerage and then call me back and loop me in.
After he looped me in, we began to execute the roll over. I was actually pretty nervous.
I was nervous to trust someone that I didn’t know (this Capitalize rep) with this process. We were dealing with a very large portion of my retirement savings, and I wanted to make sure that the roll over was done correctly.
With that said, I had a lot of questions and thankfully, the Capitalize representative was happy to answer them for me. He remained calm and confident, which really helped to ease my nerves. He was also very patient.
I was grateful for my Capitalize representative during the 401(k) roll over process
During the phone call, the brokerage representative (the person on the phone with me and the Capitalize rep) was speaking very quickly and rather dismissively. This also made me nervous.
I wanted to know the exact amounts that were being rolled over from my old 401(k) into my Roth and traditional IRAs, and the way the brokerage representative was explaining it was not very clear to me.
Immediately the Capitalize rep could sense my uncertainty and hesitation, so he would often step in, stop the conversation and say “Taylor, does that makes sense to you?”, or “Do you have any questions, Taylor?” or he would ask the brokerage representative to repeat herself for both our understanding.
He even wrote down amounts and details and repeated them back to the brokerage rep for her confirmation to make sure that I had all of the details that I wanted.
This really made me feel like he cared that my roll over was done correctly and that he was looking out for me.
I wasn’t expecting to feel so nervous on the call, but I think this just goes to show how nice it is to have someone in your corner. I’m not sure how this phone call would have gone had I been by myself and not had a Capitalize representative by my side.
When the rollover was authorized and our phone call was ending, the brokerage representative dropped off the call and the Capitalize rep asked me to stay on. He wanted to make sure that I was comfortable with the roll over and to see if I had any more questions.
I assured him that I felt good about the roll over, and thanked him for his diligence with the process.
This authorization phone call process took about 20 minutes.
Overall Capitalize Rating: 8.5/10
Overall, I love Capitalize, and I’m so proud to be partnered with them. They make the 401(k) process SO easy, and their people make the process bearable and quick.
And the best part? It’s free!
I highly recommend the Capitalize rollover platform to anyone that has an old 401(k), 403(b), etc. that they’d like to roll over into an IRA.
I’m rating them an 8.5/10, but if the amount of emails were a little less and I could have scheduled my authorization appointment call sooner (which may be the case for you now), I would rate them a 10/10!
UPDATE July 2023: I used Capitalize AGAIN!
I was recently laid off from my tech job, so I had another old 401(k) to rollover.
Without hesitation, I used Capitalize again. This time it was even better and faster.
Capitalize set me up with one of their representatives (Travia), I hopped on the video call, and Travia walked me through my roll over and answered any questions that I had.
The call took no more than 10 minutes, and everything was completed with ease.
This time, I would rate Capitalize a 10/10. Truly a wonderful service run by wonderful people.
Click here to roll over your old 401(k) for free with Capitalize:
This post was all about the pros and cons of Capitalize’s 401(k) roll over process.
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