We're frequently told to save money. Particularly for retirement, when we're going to be in declining health and we probably should just enjoy ourselves instead of working a lot.
We're also told to curb our spending, especially what we're borrowing, particularly when it comes to credit cards.
This week, I got a credit card offer in the mail. It encouraged me to go to a website, punch in a 9-digit number, and I could have confirmation of my approval in 30 seconds. The card came with a $29 one-time processing fee, a $95 one-time enrollment fee, a $48 annual fee, and a $7 monthly fee, billed at $84 annually.
In other words, it would have taken me about 30 seconds to drop $256 before I'd even received the card in the mail.
The other thing that happened this week is that I started to consolidate a 401(k) from a previous job into my current job's 401(k) plan. My current job's plan is far out-performing the other, and I thought it'd be nice to have all of that in one place.
I logged into my old job's plan account management tools. It had a rollover button, but it was for rolling accounts in, not out to other plans. So I logged into the other account, and it told me to call customer service.
I called customer service, punched my way through an automated system to get to a human, who then patched me over to the rollover department, who sent me to an administrator for our company's plan, who told me I'd have to call my HR department.
The next day, I did, and they sent me forms for accepting a rollover.
Now that I knew how the acceptance side worked, I had to get a check from the plan I was closing. I logged into the website, called the number I was given, and was told to call the plan administrator at the company.
I did, and she dropped forms in the mail, which meant two more days.
I got the forms; it's a fairly complicated package. Here's what I have to do.
- Fill out a form, and mail it to the receiving plan for a signature to say it's actually a retirement plant. Then they have to mail it back to me.
- Write a letter (they include a sample), fill out another form, and include the form I received from my current plan, and mail that to the company I used to work for.
- The company I used to work for will then mail the package to my old plan, who will take up to 10 business days to review my 4 sheets of paper and cut a check. I'm unclear on whether the check goes to my old company and then to me, or if it comes right to me.
- Once I get the check, I have five more pages to fill out and mail to my HR department along with the check, and they will then forward the check to the receiving plan, who will take up to 10 business days to process the rollover.
So let's review. Spend $256 for the privilege of receiving a credit card: 30 seconds. Roll a prior 401(k) into a current 401(k): 20 business days of processing, plus 17 postal days, plus the time it actually takes for me and my HR representatives to fill out the forms and switch envelopes, plus whatever time it takes for my current plan to sign a piece of paper saying it's a retirement plan.
So yeah, it's going to take 2 months for wiser savings, vs. 30 seconds for a bad borrowing decision that I'm sure ropes in a lot of people.
I think this is what they call a FAIL.