Author Topic: Links or Advice on how to consolidate my 401Ks to a Traditional IRA?  (Read 300 times)

alcon835

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I have several 401Ks from previous jobs with over 100K total across them. I've got a new job as of April 2018, and am considering consolidating all my 401Ks into a Traditional IRA in my Vanguard account.

Are there any articles or posts here or recommendations for what this process might looks like? I've read a few things online but they're all pretty generic. I'm thinking about reaching out to Vanguard and see if they'll walk me through it.

alcon835

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Re: Links or Advice on how to consolidate my 401Ks to a Traditional IRA?
« Reply #1 on: January 09, 2019, 06:58:17 AM »
I probably should have googled for 5 more minutes: https://investor.vanguard.com/401k-rollover/

Still, if you're reading this and have something helpful to share (even a story about what this process was like for you!) it would be encouraging to me as well as helpful for those who come after :)

frugalnacho

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Re: Links or Advice on how to consolidate my 401Ks to a Traditional IRA?
« Reply #2 on: January 09, 2019, 07:42:16 AM »
Contact vanguard.  You can either call them, or do it online.  You'll identify the IRA account you want to put the money into (and create the account if it doesn't already exist) and inform vanguard of your intentions.  They will provide you with a letter that you can send to your current 401k custodian that will detail what they need to do.

You may also need to contact your 401k custodian and fill out paperwork for a distribution.  You'll check the box that you want to perform a rollover to another IRA account.  If possible do a direct rollover (a direct rollover means they send the money directly to vanguard without you touching it.  an indirect rollover means they send you a check, and then you send the check to vanguard [with an indirect rollover you only have 60 days to get the money into the new account]). 

Here is the saga of my latest rollover: https://forum.mrmoneymustache.com/welcome-to-the-forum/401k-rollover-frustrations/

alcon835

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Re: Links or Advice on how to consolidate my 401Ks to a Traditional IRA?
« Reply #3 on: January 09, 2019, 07:17:40 PM »
Contact vanguard.  You can either call them, or do it online.  You'll identify the IRA account you want to put the money into (and create the account if it doesn't already exist) and inform vanguard of your intentions.  They will provide you with a letter that you can send to your current 401k custodian that will detail what they need to do.

You may also need to contact your 401k custodian and fill out paperwork for a distribution.  You'll check the box that you want to perform a rollover to another IRA account.  If possible do a direct rollover (a direct rollover means they send the money directly to vanguard without you touching it.  an indirect rollover means they send you a check, and then you send the check to vanguard [with an indirect rollover you only have 60 days to get the money into the new account]). 

Here is the saga of my latest rollover: https://forum.mrmoneymustache.com/welcome-to-the-forum/401k-rollover-frustrations/

Thank you so much!!

ericrugiero

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Re: Links or Advice on how to consolidate my 401Ks to a Traditional IRA?
« Reply #4 on: January 10, 2019, 10:54:35 AM »
I've never done it but from what I've heard the key is to do a "DIRECT ROLLOVER" as suggested above.  This avoids any chance of you having to pay taxes and penalties due to an early withdraw. 

msbutterbean

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Re: Links or Advice on how to consolidate my 401Ks to a Traditional IRA?
« Reply #5 on: January 10, 2019, 11:56:32 AM »
I did this recently, too, into a Vanguard account. They did supply me with a letter, as mentioned in an earlier comment, but once I had an account number with them I found it easier to call my existing accountholders and arrange it all over the phone. It felt like the letter step added time and the possibility of misdirection. But all in all, for me, very easy and very fast.

ericbonabike

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Re: Links or Advice on how to consolidate my 401Ks to a Traditional IRA?
« Reply #6 on: January 10, 2019, 01:12:15 PM »
the only thing I would caution is that:

If you rollover a 401k into a IRA it will affect your ability to fund a backdoor Roth IRA in the future (if your MAGI is too high to contribute directly to a Roth IRA).

If you are worried that at some point in the future, your MAGI will approach the limit, then consider rolling all of your old 401ks into your current employer's 401k. 
The only drawback that I can tell for this is that you might think your current employer's 401k isn't as good as a standalone vanguard/fidelity/etc account of your own choosing.



alcon835

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Re: Links or Advice on how to consolidate my 401Ks to a Traditional IRA?
« Reply #7 on: January 11, 2019, 06:08:08 AM »
I did this recently, too, into a Vanguard account. They did supply me with a letter, as mentioned in an earlier comment, but once I had an account number with them I found it easier to call my existing accountholders and arrange it all over the phone. It felt like the letter step added time and the possibility of misdirection. But all in all, for me, very easy and very fast.

That's good to know. I may just create the account and call my 401K providers directly then if I go this route.

alcon835

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Re: Links or Advice on how to consolidate my 401Ks to a Traditional IRA?
« Reply #8 on: January 11, 2019, 06:09:24 AM »
the only thing I would caution is that:

If you rollover a 401k into a IRA it will affect your ability to fund a backdoor Roth IRA in the future (if your MAGI is too high to contribute directly to a Roth IRA).

If you are worried that at some point in the future, your MAGI will approach the limit, then consider rolling all of your old 401ks into your current employer's 401k. 
The only drawback that I can tell for this is that you might think your current employer's 401k isn't as good as a standalone vanguard/fidelity/etc account of your own choosing.

Thank you @ericbonabike. I hadn't really considered this and, if I am honest, I don't know what MAGI limits are (going to google it right now!)

Edit: Google'd it! Clearly I need to do some more research, but since my current employer's 401K is fantastic (very low fees, total control of the funds I go into [I've chosen EFTs similar to my personal investments]) I'm thinking that would be my best bet currently.
« Last Edit: January 11, 2019, 06:36:08 AM by alcon835 »