The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: BrianT on June 24, 2014, 05:00:48 PM

Title: Should I do anything with these accounts?
Post by: BrianT on June 24, 2014, 05:00:48 PM

I have some retirement accounts right now that are no longer tied to my employer:

Old 401k in Merrill Lynch: $128,595 (funds mimic total market index)
Rollover IRA: $7,420 (~40% in BRK.B and remainder in total market index)
Roth IRA: $5,610 (all funds in total market index)
Annual income: ~$90k (expecting an AGI of about $80k)

I am 31 years old. My question is, should I be doing something with the 401k that is still with my old employer? Should I move the 401k to the Roth IRA? Is there some kind of tax advantaged move (whether the benefit is now or 20 years later) I should be making? I hope I'm making sense here.

UPDATE:
Here are the fees for my 401k:
LARGE CAP INDEX (mimics S&P 500) - 0.02%
SMALL MID CAP VALUE - 0.64%
SMALL MID CAP GROWTH - 0.89%

80% of the money is sitting in the Large Cap Index.

Title: Re: Should I do anything with these accounts?
Post by: matchewed on June 24, 2014, 05:06:52 PM

As for the old 401k you'll need to determine if they are assessing any fees on it, usually something along the lines of maintenance fees. If so I'd advise moving it to an IRA, honestly I'd advise that anyway as you'll have "better" control over it.

Moving your 401k to a Roth IRA is complicated given your current high income. You'd have to pay income tax on the conversion. I'd save that for low tax years personally and break it up.

As for everything else just count it in your annual/biannual/whatever AA/financial review.