Resurrecting an old thread here, because I think the thread adds context and I'd like to hear from some of the original responders that helped me out before.
I have since left my job where I had this seemingly great 401k option.
I now have the decision of rolling that 401k money into my Roth IRA at Vanguard, or leaving it with Fidelity in the Vanguard "Target Retirement Trust" where it sits now. Given the lows fees and other factors considered above, it doesn't seem like a bad idea to leave them with Fidelity in the 401k.
That being said, I'd like to have as few 'accounts' as possible, because I like simplicity.
Now that I'm going to have a new 401k at my new employer, and it is with Schwab (see new thread here for more on that: http://forum.mrmoneymustache.com/ask-a-mustachian/help-me-choose-a-fund-(or-two)-in-my-new-401k/ ),
and I'm going to have an HSA,
and I'm probably going to have an ESPP account (recordkept by Fidelity),
I like the idea of consolidating this Fidelity 401k from my old employer to my Vanguard Roth IRA.
Thoughts? What are the real things I should be considering with this?
Is the whole 'rollover your 401k' thing just a marketing gimmick from those that benefit from it?
Thanks!
- Bumping this -
Old 401k Rollover considerationsWhat are the
real considerations for a rolling over a 401k from an old employer? Any advice?
Is the whole 'rollover your 401k' thing just a marketing gimmick from those that benefit from it?
(I'm doing my taxes now and trying to figure out if I should roll it over or leave it alone.)
Pension decisionAdditionally, after leaving my old employer, I have a pension benefit projected to be $712.50 per month under the Single Life Annuity form of payment, if I start receiving benefits on my 65th birthday. I'm currently 26 year old, and have no idea what to do with this money/circumstance.
I can also:
- take a lump sum payment now (probably subject to taxation), then invest it myself
- start receiving benefits immediately
- start receiving benefits at some point in the future (if before age 65, not sure how taxes would work)
On the one hand, if I were to 'win the lottery', I would take the lump sum and invest it. But I also like the idea of 'source diversification', in that by keeping this 'money' with the benefit administrator/employer, I hedge myself a little against my own errors, or a crash of other investments or things I encounter over the next 40 years before I need this money. That may just be made up/unfounded worries, but I somewhat like the idea of this money being completely 'safe' and separate from all the money i save and invest on my own. However, I don't know if this is any more safe than just investing it myself.
If my prior employer isn't around one day , then is my pension money gone forever (think Arthur Andersen, I used to work for a big 4 accounting firm)? (Given my inside experience with the current landscape of public accounting firms and their willingness to stretch the limits on 'independence', it's not unrealistic that another of these firms will collapse/disband at some point.)
What if the plan/benefits administrator isn't around one day (Benefits Express/Hewitt), then is my pension money gone forever?
So in summary - I'd like some feedback on:
1) Should I rollover my 401k? it is in Vanguard Target Retirement Trust 2055, held with Fidelity, with a .06% Gross ER.
2) What should I do with my pension benefits from my old employer?
Thanks!