Author Topic: Old 401K help  (Read 5051 times)

lauranay16

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Old 401K help
« on: May 10, 2015, 08:44:16 PM »
Hi all! I know this question has been asked a million times but here goes.

I have an old 401k that was worth 29k,  7 years ago. It has been sitting because I had no idea what to do with it and 60% of it is in Walmart stock. As much as I hate Walmart , their the board of directors  knows way more about making money than I do. It is now worth 43k but fluctuates according to Walmarts latest successes and failures. The manager of my current 401k has encouraged me to roll it over but I don't trust anyone that stands to gain from this action. The consensus seems to be roll it over in to an IRA but I haven't really figured out why that's the best course of action other than there are more investment options.

I am 45 and recently divorced after 25 years and am working on learning as much as I can about taking control of my financial situation.   I was one of those dumb women that let my husband deal with it all those years because I was to lazy to figure it out. Dumb move I know but I am making up for lost time as quickly as possible.

I appreciate any suggestions. Thanks!

MDM

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Re: Old 401K help
« Reply #1 on: May 10, 2015, 09:11:31 PM »
If you had $29K in VTSAX 7 years ago you would have ~$52K now.  See http://www.morningstar.com/funds/XNAS/VTSAX/quote.html.
 
That's not to say that VTSAX is your (or anyone's) best investment - but it is meant to say that you might do better with a collection of stocks instead of an individual stock.

Having the money in an IRA does give you much flexibility, including the option to invest in low fee funds.  One potential downside is "backdoor Roth" contributions become more difficult - but if you aren't ever going to do a backdoor Roth then that downside is irrelevant.

What funds choices, and associated fees, do you have for your old and current 401ks?

lauranay16

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Re: Old 401K help
« Reply #2 on: May 10, 2015, 10:15:46 PM »
 Old 401k:

 Quarterly bookeeping fee $3.38

BLACKROCK RUSSELL 1000 INDX TR   Core   ZBGRIT   
BLACKROCK RUSSELL 2000 INDX TR   Core   ZBGRNT   
INTERNATIONAL EQUITY FUND   Core   WMTX2   
LARGE CAP EQUITY FUND   Core   WMTX8   
REAL ASSETS FUND   Core   WMTX7   
SMALL MID CAP EQUITY FUND   Core   WMTX9   
WAL MART STORES INC   Core   WMT   

BOND FUND   Core   WMTX1   
JPMORGAN SHORT TERM BOND TRUST   Core   ZDBCFT   
BLACKROCK MONEY MARKET TRUST   Core   BGMMT   

MYRETIREMENT FUND   Core   WMUXX   
MYRETIREMENT 2020 FUND   Core   WMU20
MYRETIREMENT 2025 FUND   Core   WMU25   
MYRETIREMENT 2030 FUND   Core   WMU30   
MYRETIREMENT 2040 FUND   Core   WMU40   
MYRETIREMENT 2045 FUND   Core   WMU45   
MYRETIREMENT 2050 FUND   Core   WMU50   
MYRETIREMENT 2055 FUND   Core   WMU55
MYRETIREMENT 2060 FUND   Core   WMU60   


Current plan Choices:

Schwab Investor Money Fund   
Vanguard GNMA
Vanguard Balanced
American Funds Cap Income Builder
American Funds Wash Mutual R4
Domini Social Equity FundView
Vanguard 500 Index AdmiralView 
Vanguard Total Stk Mrkt
Columbia Marsico Focused Eq
Vanguard Extended Market
Vanguard Mid Cap Growth
Vanguard Small Cap Value Index
Baron Small Cap Retail   
Dodge & Cox International Stock   
American Funds EuroPacific
Lazard Emerging Markets
Vanguard REIT


I am not having any luck finding transaction fees online, I will try and see what I can dig up tomorrow.

JLee

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Re: Old 401K help
« Reply #3 on: May 11, 2015, 02:46:29 PM »
I would roll it into an IRA - it won't be tied to your employer that way, and you will have more flexibility with what you can do with it.

lauranay16

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Re: Old 401K help
« Reply #4 on: May 11, 2015, 03:51:29 PM »
I am leaning that way. Some Roth and the rest regular. Any thoughts on that?

JLee

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Re: Old 401K help
« Reply #5 on: May 11, 2015, 04:17:51 PM »
I am leaning that way. Some Roth and the rest regular. Any thoughts on that?
Is it a traditional or Roth 401k right now?

lauranay16

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Re: Old 401K help
« Reply #6 on: May 11, 2015, 04:27:57 PM »
Traditional.

JLee

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Re: Old 401K help
« Reply #7 on: May 11, 2015, 05:10:50 PM »
You'll pay tax on it to convert to a Roth, so unless you need it in 5 years I would likely do traditional.

lauranay16

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Re: Old 401K help
« Reply #8 on: May 11, 2015, 05:53:48 PM »
I wont need it in the next 5 years but what if I need it before I turn 59? That would have a penalty correct?

JLee

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Re: Old 401K help
« Reply #9 on: May 11, 2015, 09:13:41 PM »
I wont need it in the next 5 years but what if I need it before I turn 59? That would have a penalty correct?

https://www.kitces.com/blog/understanding-the-two-5-year-rules-for-roth-ira-contributions-and-conversions/

The general recommendation is to have enough post-tax savings/investments to carry you for a five year period, which you can use to roll traditional IRA's to Roth.

lauranay16

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Re: Old 401K help
« Reply #10 on: May 12, 2015, 09:05:33 AM »
Thank you JLEE!