Author Topic: Combining retirement accounts...  (Read 2795 times)

Pug Lover

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Combining retirement accounts...
« on: February 07, 2013, 03:09:15 PM »
Hello,
I'm new to the forum. Just started reading MMM - very interesting stuff!

To cut to the chase, I'm currently enrolled in my employer's 401K plan. I also have a 403b plan from a place I worked like 5 years ago. I've been meaning to roll the 403b into the 401k but it's been on the backburner for a while.

Are there any disadvantages/advantages to rolling the 403b into the 401k? From my standpoint, I would like to do it just to simplify matters so I don't have so many accounts (I also have a personal ROTH IRA with Vanguard that is separate).

I also have a lot to learn about investing, etc, and I'm hoping reading more of the blog will help me put money where it will properly grow instead of my savings account which is at like .2% interest.

Thank you very much!

P.S. Also curious to know how many MMM readers actually have mustaches.

Spork

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Re: Combining retirement accounts...
« Reply #1 on: February 07, 2013, 03:31:27 PM »
I'm no expert here... but... when I've done this, I have rolled it into a personal (non-work related) IRA.  My reasoning being that I had more investment options and easier access to the money than going through some work interface.

RoseRelish

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Re: Combining retirement accounts...
« Reply #2 on: February 07, 2013, 04:02:02 PM »
Agreed. Roll it into a personal IRA, not your work's 401k. You'll get unlimited investment options and can roll your 401k over when you retire to keep things simple and in one account.

Pug Lover

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Re: Combining retirement accounts...
« Reply #3 on: February 08, 2013, 07:30:14 AM »
Thank you for the responses!

So it sounds like there really is no advantage to rolling the 403b into my employer-sponsored 401k plan. In fact, rolling the 403b into a PERSONAL IRA instead would allow me more flexibility (as I would likely have more fund options). Is that correct?

On that line of thought, is there any disadvantage to just keeping the 403b as is? I guess that is the easiet option since it requires me to do nothing. I guess I haven't been unhappy with the 403b plan - it's just that I haven't made any contributions to that account since I left that previous employer (I do however contribute regularly to my current employer's 401k).

Thanks again! I'm doing my best to learn and understand more about financial matters.

LowER

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Re: Combining retirement accounts...
« Reply #4 on: February 08, 2013, 07:35:29 AM »
If you ever might do a backdoor Roth, you should probably roll into the 401k or into a Roth IRA. If you're not above the income threshold for Roth IRA contributions, and never expect to be then this doesn't apply to you.

momo

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Re: Combining retirement accounts...
« Reply #5 on: February 08, 2013, 09:16:03 AM »
Have you considered rolling the 401k into your existing Roth IRA? Yes you will pay some taxes  when you do so. Or you could even split the amount into both pre-tax and post-tax accounts to get the best of both situations. Let us know how it goes. Cheers!