I started a new job today and had a look at their 401K S&P 500 fund and was a little disappointed. It's managed by Transamerica and the expense ratio is 0.42%. That's a lot higher than my previous employer that offers it at 0.09%. The new company matches 60% up to 8% plus an end of the year profit sharing match of 5.2% of my pay which for me would be about $2800. New company's match and profit sharing are not vested until after 3 years of employment. I have a balance in my old 401K plan of about $120K about 80K in Roth and 40K in traditional. I am 30 and I plan on staying for at least 3 years.
I'm thinking of a few options:
With the higher expense ratio I'm thinking of just leaving my old 401K with my old employer. Not contributing to a company 401K until the match starts and put the money instead in a ROTH IRA. I seem to recall people doing this. For any of you who have or are familiar with this procedure. How easy was it to transfer from your 401K to an IRA? What potential issues did this causes? Difficulties? Do you think it is worth
Taking all of the money from the old 401K and putting it into a traditional and roth IRAs. The downside being I can't put it into another 401K plan in the future.
What do you guys think?
