Charles Schwab vs Wealthfront
Step-by-Step: Charles Schwab to Wealthfront
Should You Roll Over Your Charles Schwab 401(k) to Wealthfront?
Rolling over a 401(k) from Charles Schwab to Wealthfront usually makes sense when: (1) you've left the employer, (2) the Charles Schwab plan has high fees or limited fund choice, (3) you want to consolidate retirement accounts, or (4) you want better customer service or tools at Wealthfront.
Reasons to keep your money at Charles Schwab
Don't roll over if: (1) you have $5,000+ in Charles Schwab and the plan offers institutional-class share funds you can't access elsewhere, (2) you're 55+ and might use the "rule of 55" to take penalty-free 401(k) withdrawals after leaving the employer (this only works with the employer plan, not an IRA), or (3) you're worried about creditor protection — 401(k)s have stronger ERISA protection than IRAs in some states.
Tax implications
A direct rollover from a Traditional 401(k) at Charles Schwab to a Traditional IRA at Wealthfront is non-taxable. Roth 401(k) money rolls into a Roth IRA, also non-taxable. If you convert pre-tax 401(k) funds to a Roth IRA at Wealthfront, the entire converted amount is taxable as ordinary income in that tax year — useful for backdoor Roth strategies but plan for the tax bill.
Common pitfalls
The biggest mistake is taking a 60-day indirect rollover instead of a direct rollover. Charles Schwab would withhold 20% for federal taxes; you'd have to come up with that 20% from another source within 60 days or face taxes plus a 10% early withdrawal penalty. Always ask for a "direct rollover" or "trustee-to-trustee transfer" — never have the check made payable to you personally.