yet another 401(k) to Vanguard IRA post

[frozenstache]

I just left a company with a matching 401(k) plan and have about $100k in value currently.  My current employer does not yet have a 401(k) but probably will within a year.  The main reason I was thinking of converting to a Vanguard IRA is because about half of my investments are in Fidelity Low-Priced Stock Fund  FLPSX  with an expense ratio = 0.80%.  I figure even if I don't contribute much to the Vanguard IRA (because I will most likely have another 401k at some point) it is still worth it because the expense ratio of 0.80%  is high compared to  0.17% for VTSMX.  All of my funds in the current 401k are at least several years old so I shouldn't get hit with any fees.  I also was considering opening a Vanguard Roth IRA for my wife and I both because we should be able to max them both out each year.  My logic for this is because we are above the AGI of $89K and I would have a 401(k) so any IRA contributions will not be deductible.  Thoughts, comments, suggestions?

[Cooperd0g]

Yes, roll over to a Vanguard IRA. Not only do you get lower fees, but you get access to all of Vanguard's family of funds with low costs.

Always remember that you pay more fees in a company 401(k) than just the ER of the funds themselves. There are 401(k) maintenance fess that are pretty much hidden - as in they show you the funds and ERs of those funds, but they don't include the overall fees just to have your 401(k) account open. This is why you always roll over 401(k)s to Vanguard and never roll them over to the new job 401(k).

As for the Roth IRAs, I am a big fan as long as you are in the lower tax brackets. If you go up to 25% or higher then it might be worth taking the tax deduction now.

[frozenstache]

Yep, I agree on not rolling anything into the new 401(k) and I was wondering if there might be some hidden fees with them.  We are currently in the 25% tax bracket so I probably need to consider more what my income will be when I stop working to know if the roth is the best option.  Thanks for weighing in on this.

[Stache In Training]

Also, at that value, you will qualify for VTSAX, which is the admiral version of that same fund.  It's ER is actually 0.05%.  Just wanted to point that out, and make you even more happy!

[SoCal]

You do not want pre-tax IRA dollars as a high-income earner as you lose the ability to do back-door Roth contributions. Keep it in a 401K, either old emploer or new employer or Solo 401K w/ Schwab.