Switching jobs and need to reallocate 401(k)

[Bearblastbeats]

I am leaving my current employer this week and will not be allowed to participate in my new employers 401(k) plan until I have completed my first calendar year.

What is the more simple way to move into a low maintenance IRA plan?

Or the unpopular option,  since there is only 11k in mine, might I just cash out and take the money to pay off the rest of my car loan?

[onlykelsey]

Where do you keep your investments generally?  if you have an account at fidelity or schwab or vanguard, I'd just use them. 

What the hell kind of rate do you have on your car loan that paying the early withdrawal penalty (plus lost gains etc) would make paying off your car loan a good idea?  30%???

[Bearblastbeats]

I have massmutual for my current plan.

and my car loan is a 9.9% (which is after a refi last November from 18%)

[Another Reader]

Unpopular and not very smart.  Fidelity, Vanguard or Schwab.  Invest the current 401 (k) in low cost index funds and set up contributions to an IRA for 2018 at the same time.

Don't pay the penalty and the taxes on the withdrawal.  The account is not a savings account to pay off debt.  It's the money you will need when you retire.  Spend a little less and put more to the car loan until you pay it off.  You can never make up the time on your retirement investing.

[onlykelsey]

I have massmutual for my current plan.

and my car loan is a 9.9% (which is after a refi last November from 18%)

I'm not familiar with massmutual.  From a cursory search it looks like they have pretty high expense ratios on their products.  I would roll over directly in to Schwab or Vanguard.  I know Vanguard was helpful to me when I used them, but plenty of people use schwab. https://www.bankrate.com/investing/401k-rollover-guide/ Don't forget the 60 day time limit.  I'd put it all in to VTSAX at Vanguard, but end date retirement funds are a diversified choice and might make more sense if you're at the beginning of your investing career.

Your car loan sounds absolutely bonkers.  This is obviously more of a spending question and not an investment one, but what happened there?  Did you buy way too much car? Can you sell the car, pay off the loan, get a beater, and work on your credit score?  Use a bike? 18% (or 9%!) for a car loan is highway robbery.  Regardless, though, you take 10% right off your 11,000 in fees because you are violating the terms of the 401K tax shelter, so it STILL doesn't make sense mathematically.

[onlykelsey]

Also, check the new 401K's documents carefully.  It's possible you can contribute but get no match, or that you can roll over even if you can't start contributing.

[Bearblastbeats]

I have massmutual for my current plan.

and my car loan is a 9.9% (which is after a refi last November from 18%)

I'm not familiar with massmutual.  From a cursory search it looks like they have pretty high expense ratios on their products.  I would roll over directly in to Schwab or Vanguard.  I know Vanguard was helpful to me when I used them, but plenty of people use schwab. https://www.bankrate.com/investing/401k-rollover-guide/ Don't forget the 60 day time limit.  I'd put it all in to VTSAX at Vanguard, but end date retirement funds are a diversified choice and might make more sense if you're at the beginning of your investing career.

Your car loan sounds absolutely bonkers.  This is obviously more of a spending question and not an investment one, but what happened there?  Did you buy way too much car? Can you sell the car, pay off the loan, get a beater, and work on your credit score?  Use a bike? 18% (or 9%!) for a car loan is highway robbery.  Regardless, though, you take 10% right off your 11,000 in fees because you are violating the terms of the 401K tax shelter, so it STILL doesn't make sense mathematically.

I am very new to investing and typically just match the company's contribution.

Also, I have a hit to my credit when I voluntarily repoed a car about ten years ago. (it just fell off my report this month). Need a car to get to work, and also I am a project manager which requires me to travel.

[SKL-HOU]

Just leave it in your previous employer's plan until you start your new one. Then rollover to the new one.

[Bearblastbeats]

Just leave it in your previous employer's plan until you start your new one. Then rollover to the new one.

I thought of that but wasn't sure I can?

[SKL-HOU]

I believe if it is over 5k, you can but check with your specific plan. I left mine with my employer for about 3 years before transferring.

[JetBlast]

Like others have said, I’d just roll it into an IRA at Vanguard, Fidelity, or Schwab unless you know the new employer’s plan has exceptional expense ratios. Vanguard can easily explain the process over the phone. If you want to sit down with someone face to face then pick Fidelity or Schwab.

[swampwiz]

Or the unpopular option,  since there is only 11k in mine, might I just cash out and take the money to pay off the rest of my car loan?

If you do that, you will FAIL your Moustaschian test!

Roll it over (or better yet, directly transfer it) into an IRA.