Transition to Vanguard Brokerage Account [Impact on Social Security payments]

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Topic Author
Tutone
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Joined: Mon May 04, 2020 12:11 am

Transition to Vanguard Brokerage Account [Impact on Social Security payments]

Post by Tutone »

Making the transition from the mutual fund platform to the brokerage account platform requires that one change their direct deposit information because Vanguard account numbers will change. In my case the Social Security Administration would have to be notified of new account numbers generated by the transition in order for the monthly benefit payments to be sent to the new correct account. It will take Social Security two months to incorporate the new account information into their data base and begin sending payments to the new account. What happens to the monthly payments that are deposited into old Vanguard account numbers? Will Vanguard accept those direct deposits into the new accounts until Social Security is able to start sending payments to the new accounts? Has anyone out there dealt with this issue? I am still waiting for an answer from Vanguard. Thanks for any information.
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Klewles
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Re: Transition to Vanguard Brokerage Account

Post by Klewles »

If you haven't yet made the transition, there's an easy solution. Before making the transition, open a new brokerage account with Vanguard, and inform SSA of the new account number. Once SSA payments to the new brokerage account stabilize, then transition your mutual funds to the new account.
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retired@50
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Re: Transition to Vanguard Brokerage Account

Post by retired@50 »

Klewles wrote: Sun Aug 14, 2022 3:59 am If you haven't yet made the transition, there's an easy solution. Before making the transition, open a new brokerage account with Vanguard, and inform SSA of the new account number. Once SSA payments to the new brokerage account stabilize, then transition your mutual funds to the new account.
This ^^^ sounds like a good idea to me.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
UpperNwGuy
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Re: Transition to Vanguard Brokerage Account

Post by UpperNwGuy »

Klewles wrote: Sun Aug 14, 2022 3:59 am If you haven't yet made the transition, there's an easy solution. Before making the transition, open a new brokerage account with Vanguard, and inform SSA of the new account number. Once SSA payments to the new brokerage account stabilize, then transition your mutual funds to the new account.
This is the solution.

Alternatively, you can send the Social Security deposits to your bank.
Topic Author
Tutone
Posts: 10
Joined: Mon May 04, 2020 12:11 am

Re: Transition to Vanguard Brokerage Account [Impact on Social Security payments]

Post by Tutone »

Tutone wrote: Sun Aug 14, 2022 12:34 am Making the transition from the mutual fund platform to the brokerage account platform requires that one change their direct deposit information because Vanguard account numbers will change. In my case the Social Security Administration would have to be notified of new account numbers generated by the transition in order for the monthly benefit payments to be sent to the new correct account. It will take Social Security two months to incorporate the new account information into their data base and begin sending payments to the new account. What happens to the monthly payments that are deposited into old Vanguard account numbers? Will Vanguard accept those direct deposits into the new accounts until Social Security is able to start sending payments to the new accounts? Has anyone out there dealt with this issue? I am still waiting for an answer from Vanguard. Thanks for any information.
Here is Vanguard's response if anyone is interested. Thank you for taking the time to contact us about the continuation of your
direct deposit service if you transition your account.

While we are encouraging clients to transition to our brokerage platform,
if you have been in contact with the Social Security Administration and
have been informed that attempting to reestablish a direct deposit service
would take months to reestablish, you do not have to transition at this
time.

When transitioning your account, direct deposit only partially carries
over. In most cases, the service remains on the Vanguard account. However,
you must provide your new account information (e.g., new direct deposit ID
and bank routing numbers) to your sending institution. It is important that
you contact the direct deposit sender and cancel the service on that side
when transitioning as well. If the sender initiates a direct deposit into
your mutual fund account after you have transitioned to a Vanguard
Brokerage Account, the deposit may be rejected back to the sender/employer
by the bank or Vanguard.

Once the transition is complete, you can re-establish direct deposit on
your new Vanguard Brokerage Account. When establishing the direct deposit
to your existing brokerage account you will receive new direct deposit
instructions which you will need to provide to your direct deposit source
in order to reinitiate the direct deposit. Below I have included
instructions on how to turn off the direct deposit, re-establish the direct
deposit and transition your account.

>> How to turn off direct deposit

1. Log on to your account.
2. From the "My Accounts" dropdown, select "Profile & account settings."
3. Under "Banking and money movement," select "Direct deposit" and click
the drop down associated with your direct deposit under the heading "Mutual
fund accounts."
4. Select "Deactivate service."

>> How to re-establish direct deposit once your account is transitioned

To re-establish the process for the direct deposit service, follow these
steps:

1. Log on to your account.
2. From the "My Accounts" dropdown, select "Profile & account settings."
3. Under "Banking and money movement," select "Direct deposit" and follow
the instructions.
4. You can print the Direct Deposit Service Instruction Form that displays.
5. Provide the form to the employer, institution, or agency that is the
source of your deposit.

You'll also need to tell your source for the deposit how much money should
be sent to Vanguard and on what schedule. Your form may display “VAN” in
the Depositor Account Number section. If the source of your deposit is
unable to use those letters, then they can replace “VAN” with the numbers
826 for mutual fund only accounts and 396 for brokerage accounts.

>>>How to Transition your mutual fund accounts

1. Log on to your account.
2. From the "My Accounts" drop-down, select "Account overview."
3. Select the option to “Transition” your account under either the
"Balances" or "Holdings" tab.

There are no tax implications involved with upgrading to a Vanguard
Brokerage Account, nor are there any fees or charges that apply.

All transactions clear (or settle) through a settlement fund. While there
is no minimum initial investment that applies to the settlement fund for a
new Vanguard Brokerage Account, the minimum initial investment for most
Vanguard funds is $3,000. Vanguard STAR Fund and Vanguard Target Retirement
Funds require a minimum of $1,000 to start and Vanguard ETFs have an
initial minimum investment of the price of one share.
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