Author Topic: Two 401K plans and t-IRA  (Read 2021 times)

amyj05

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Two 401K plans and t-IRA
« on: February 02, 2016, 01:59:43 PM »
I just found out that my part-time job now offers a 401K plan to all employees. They will match 100% up to 3%. I really want to enroll in that plan and contribute 3% to get the company match (free money.) I have a 401K plan at my full-time job, which matches 100% of the first 3% and then 50% of the next 2%. I'm currently contributing 8% to that plan. I also have a t-IRA with Wells Fargo which I opened several years ago when I worked for a company that offered no retirement plan. I haven't contributed much to the IRA lately since I'm working on paying off my car debt. So, it's basically just idling and earning next to nothing in interest - literally. I earned 7 cents in interest last month. Both of the 401K plans are through American Funds.

I have a couple of questions:

Can I have two different 401K plans? Can I roll the IRA into one of the 401K plans? Just trying to figure out what is the best plan of action and if I can consolidate these retirement plans at all. I live in the US and I'm 28 years old.

Any input would be greatly appreciated!

zolotiyeruki

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Re: Two 401K plans and t-IRA
« Reply #1 on: February 02, 2016, 02:21:32 PM »
Yes, you can have two 401k plans.  I don't know whether you can roll a tIRA into a 401k, but I'd rather ask "why would you want to?"  You almost certainly have more options for your own tIRA than for your 401k's.

What is your tIRA invested in?  If it's a simple interest-earning account, I'd roll that into a tIRA at Vanguard in some index fund pronto.

seattlecyclone

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Re: Two 401K plans and t-IRA
« Reply #2 on: February 02, 2016, 04:31:09 PM »
You can have two 401(k) plans. Be sure not to contribute more than $18k between the two plans. Try to max out the match on each plan.

It's legal to roll a traditional IRA into a 401(k) plan. Not all plans accept these rollovers. You'll have to look into your employer's plan documents to see. If neither of your 401(k) plans will accept your IRA rollover, you can always roll that balance into a provider (such as Vanguard) that will let you invest the money rather than paying you miniscule savings account interest.

zolotiyeruki

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Re: Two 401K plans and t-IRA
« Reply #3 on: February 02, 2016, 05:51:15 PM »
And if your savings rate is high enough, you may want to keep your tIRA, so you're not limiting your pre-tax savings opportunities.

amyj05

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Re: Two 401K plans and t-IRA
« Reply #4 on: February 03, 2016, 01:47:31 PM »
Thank you all!