First post and rollover question: what would the Mustachian's do?(401k, IRA...)

[mtn]

Long time reader, first time poster. Glad that I finally registered, this forum has been a great resource for me. I'm wondering what you guys would do in this situation (see below) in regards to IRA vs. 401k distribution, as well as other mutual fund options. In January, I will be starting a new job, and will have to decide what to do with my funds.

Here is the current status:
25 years old
$40k annual income, about to increase to about $60k (cost of living will increase)
$12.5k in various stocks--almost entirely safe stocks like BRK, ABT, etc.
$30k in my 401k. This is in the Vanguard Target Date 2055, with a cost of 0.07%
$250 each ($750 total) in a municipal bond fund, a traditional Growth fund, and a Roth Growth Fund that isn't offered to the public at a cost of less than .2%. Opened this up to ensure that I will always have it, as it will not always be available to me. Haven't touched it in over 6 months since it was opened.
$1.5k in cash to my name
Would like to be buying a house within the next 1-2 years


My new employer has a KSOP plan. Not sure on the details, other than the match is $0.50 on the dollar for the first 6%. The bad part? The 401k portion is run through Principal. I don't know much of the details right now, but I would assume I cannot get a Vanguard index fund with it.

My current plan:
Leave the old 401k as is. I won't be able to find any costs that low, and I am happy with the funds that it is in.
Put in at least 6% into the new KSOP, and possibly more depending on the options. I doubt I will be maxing it out, and I doubt I will put in more than the match.
Max out a Vanguard Roth IRA


After that... What? Start putting money into those mutual funds detailed above (Don't have the prospectus in front of me, sorry)? Vanguard Traditional IRA? I'm planning on leaving the stocks alone until I sell them for a down payment on a house, but that isn't set in stone.

[MDM]

Here is the current status:
25 years old
$40k annual income, about to increase to about $60k (cost of living will increase)
$12.5k in various stocks--almost entirely safe stocks like BRK, ABT, etc.
$30k in my 401k. This is in the Vanguard Target Date 2055, with a cost of 0.07%
$250 each ($750 total) in a municipal bond fund, a traditional Growth fund, and a Roth Growth Fund that isn't offered to the public at a cost of less than .2%. Opened this up to ensure that I will always have it, as it will not always be available to me. Haven't touched it in over 6 months since it was opened.
$1.5k in cash to my name
Would like to be buying a house within the next 1-2 years

My current plan:
Leave the old 401k as is. I won't be able to find any costs that low, and I am happy with the funds that it is in.
Put in at least 6% into the new KSOP, and possibly more depending on the options. I doubt I will be maxing it out, and I doubt I will put in more than the match.
Max out a Vanguard Roth IRA

After that... What? Start putting money into those mutual funds detailed above (Don't have the prospectus in front of me, sorry)? Vanguard Traditional IRA? I'm planning on leaving the stocks alone until I sell them for a down payment on a house, but that isn't set in stone.

mtn, welcome to the forums.

Congratulations on the raise - I hope this higher COL won't eat it all.

Also, nice work saving to this point!

A couple of questions:
If you want to invest for retirement, then
  - why would you forego the tax advantages of a 401k in favor of taxable accounts?

If you want to be sure to have enough for a house down payment in a few years, then
  - why would you put money earmarked for the house into stocks, which could fall in value during that time and leave you short of the down payment needed?

[TheMoneyBadger]

I'd echo the question about not putting more in the KSOP.  Unless the options are very poor for the 401(k) portion of the plan, the tax savings would make it hard to beat in a taxable vehicle.

I'm also curious about why you have $12.5K in stocks in the first place.  It's not necessarily a bad thing but it's a fairly large portion of your net worth to have in a, presumably, limited number of stocks.  I'd probably sell them and if you're going to need the money soon, put it in a safe-ish bond fund like BSV.  There's still risk of capital loss but quite a bit less than in equities and much less than in a small number of individual stocks.  Going forward, I'm assuming you'd prefer to invest in low-cost index funds rather than individual stocks.

[mtn]

See, that is why I asked here. Last night as I was going through this at midnight, I completely blanked on the entire point of the KSOP (401k), the tax advantages. My line of thinking was that the expenses on the new 401k program are going to be much higher--I don't like what I've seen so far with Principal, but then I'm not enrolled with them yet.

As for the stocks, those were mostly from when I was in college and didn't have access to a 401k, and prior to my knowledge of Vanguard. Other than a few times that I actually played the game (i.e. BP after the spill, that worked out very well), it has just sat there, primarily with BRK which is basically a mutual fund any ways. But the point is taken, I will be moving a majority of that money into a Municipal Bond fund as it is somewhat earmarked for a downpayment.

Oh, and the COL will not eat up the raise. My pre-wife is staying behind until she gets a job in higher COL area as well. Until she does, I'll be living with my parents again. I'll be helping the pre-wife with rent still, but will have no rent of my own, and realistically very little expenses other than the train pass. Heck, knowing my mom she'll probably even make my lunch for me every day. Once pre-wife gets a job in the area, we'll get a place of our own, and the rent will likely be about double what we're paying now, but still won't eat up my raise.