Basically, you have 3 options:
1. Keep your old 401k where it is
2. Move your old 401k into your new 401k
3. Move your old 401k into an IRA
As MDM said, the big questions will be fees and availability of funds in the two 401k's. What company is your new 401k with? Comparing the two 401k's will tell you whether option 1 or option 2 is better. Option 2 does have the benefit of putting all the money in one place, for whatever that is worth.
Generally, a 401k will have higher fees and fewer options than an IRA. So chances are option 3 will be your best bet. If you go that way, and go with Vanguard, they are great at getting everything done for you. Just call them up, give them account info for your 401k, and they take care of the res. There really aren't too many rules. Just choose the Vanguard mutual fund/funds that you want to be invested in. (And you should probably be opening an IRA anyway...but that is a different post).
InsuranceMan, it looks like you might have misunderstood what curler and MDM were saying. The IRA option was to move the money in your old 401k into an IRA. No additional cash would be added.
They asked what the fees are for your old 401k because that's what's important for you to find out. That's what tells us whether it's OK to leave it there or if you need to move it ASAP. If you can find out that info we can be more helpful.
Call up Fidelity and ask them to check your old 401k to see if you are paying anything other than the expense ratios on that account. That's the easiest/fastest way. I'm doing this shortly (just haven't gotten around to it), but for me the big factors were:
1. Do I have access to any exclusive institutional shares/funds or receive a discount on funds through this 401k?
(my answer: no)
2. Do I get charged any management fees by staying with this 401k?
(my answer: no. but if the answer had been yes, I'd have considered that an pretty big plus to getting it rolled over ASAP)
3. Are there any funds I'd rather be investing in that are unavailable in this 401k?
(my answer: yes, so that's a big plus to roll it)
4. Are there any protections I currently have as a 401k that would be unavailable if rolled to an IRA?
(my answer: no, because I live in a protected asset state, so another plus to rolling)
So based off that checklist, there is every reason to roll my 401k over to an IRA. You might be getting different answers, but try running through those questions and you should know one way or another if rolling to an IRA is the right move for you.
As per #4, another thing to think about is do you have protection from judgements in the case of getting sued/bankruptcy/creditors/etc...
I live in a state where everything is protected out the wazoo no matter if you have 401Ks or IRAs (Texas), but some states do not offer the same protections for IRAs, and 401Ks are more sheltered from judgements. (not that this should be a big factor involved in deciding to roll a 401k to an IRA, but you still should be aware of the coverages)
http://www.investopedia.com/ask/answers/07/seizing-savings.asp
http://www.irafinancialgroup.com/selfdirectedassetprotection.php
^has a chart showing state by state statues for protection
Call up Fidelity and ask them to check your old 401k to see if you are paying anything other than the expense ratios on that account. That's the easiest/fastest way. I'm doing this shortly (just haven't gotten around to it), but for me the big factors were:
1. Do I have access to any exclusive institutional shares/funds or receive a discount on funds through this 401k?
(my answer: no)
2. Do I get charged any management fees by staying with this 401k?
(my answer: no. but if the answer had been yes, I'd have considered that an pretty big plus to getting it rolled over ASAP)
3. Are there any funds I'd rather be investing in that are unavailable in this 401k?
(my answer: yes, so that's a big plus to roll it)
4. Are there any protections I currently have as a 401k that would be unavailable if rolled to an IRA?
(my answer: no, because I live in a protected asset state, so another plus to rolling)
So based off that checklist, there is every reason to roll my 401k over to an IRA. You might be getting different answers, but try running through those questions and you should know one way or another if rolling to an IRA is the right move for you.
As per #4, another thing to think about is do you have protection from judgements in the case of getting sued/bankruptcy/creditors/etc...
I live in a state where everything is protected out the wazoo no matter if you have 401Ks or IRAs (Texas), but some states do not offer the same protections for IRAs, and 401Ks are more sheltered from judgements. (not that this should be a big factor involved in deciding to roll a 401k to an IRA, but you still should be aware of the coverages)
http://www.investopedia.com/ask/answers/07/seizing-savings.asp
http://www.irafinancialgroup.com/selfdirectedassetprotection.php
^has a chart showing state by state statues for protection
According to the protection laws in my state, both traditional and roth are exempt from creditors.
Thank you for the questions that you had posed.
1. Do I have access to any exclusive institutional shares/funds or receive a discount on funds through this 401k?
Nope, nothing special about the funds that I'm invested in through my 401k
2. Do I get charged any management fees by staying with this 401k?
Not that I am aware of
3. Are there any funds I'd rather be investing in that are unavailable in this 401k?
I'm not sure as I'm not up to speed on different available funds, and the benefits that would surround moving my 401k - I know, terrible answer, as I'm very, very uninformed in the investment department.
4. Are there any protections I currently have as a 401k that would be unavailable if rolled to an IRA?
Nope, I'm in an asset protected state.
It seems like Fidelity and Vanguard are the two recommended investment companies here on MMM, so I'm wondering what to do.
If I roll to an IRA, do I do a target retirement fund, or something else?
Someone had asked what company my current 401k is with, and that is Alliance benefit group, which I had never heard of before I started working here. They have some neat tools available though...
Call up Fidelity and ask them to check your old 401k to see if you are paying anything other than the expense ratios on that account. That's the easiest/fastest way. I'm doing this shortly (just haven't gotten around to it), but for me the big factors were:
1. Do I have access to any exclusive institutional shares/funds or receive a discount on funds through this 401k?
(my answer: no)
2. Do I get charged any management fees by staying with this 401k?
(my answer: no. but if the answer had been yes, I'd have considered that an pretty big plus to getting it rolled over ASAP)
3. Are there any funds I'd rather be investing in that are unavailable in this 401k?
(my answer: yes, so that's a big plus to roll it)
4. Are there any protections I currently have as a 401k that would be unavailable if rolled to an IRA?
(my answer: no, because I live in a protected asset state, so another plus to rolling)
So based off that checklist, there is every reason to roll my 401k over to an IRA. You might be getting different answers, but try running through those questions and you should know one way or another if rolling to an IRA is the right move for you.
As per #4, another thing to think about is do you have protection from judgements in the case of getting sued/bankruptcy/creditors/etc...
I live in a state where everything is protected out the wazoo no matter if you have 401Ks or IRAs (Texas), but some states do not offer the same protections for IRAs, and 401Ks are more sheltered from judgements. (not that this should be a big factor involved in deciding to roll a 401k to an IRA, but you still should be aware of the coverages)
http://www.investopedia.com/ask/answers/07/seizing-savings.asp
http://www.irafinancialgroup.com/selfdirectedassetprotection.php
^has a chart showing state by state statues for protection
According to the protection laws in my state, both traditional and roth are exempt from creditors.
Thank you for the questions that you had posed.
1. Do I have access to any exclusive institutional shares/funds or receive a discount on funds through this 401k?
Nope, nothing special about the funds that I'm invested in through my 401k
2. Do I get charged any management fees by staying with this 401k?
Not that I am aware of
3. Are there any funds I'd rather be investing in that are unavailable in this 401k?
I'm not sure as I'm not up to speed on different available funds, and the benefits that would surround moving my 401k - I know, terrible answer, as I'm very, very uninformed in the investment department.
4. Are there any protections I currently have as a 401k that would be unavailable if rolled to an IRA?
Nope, I'm in an asset protected state.
It seems like Fidelity and Vanguard are the two recommended investment companies here on MMM, so I'm wondering what to do.
If I roll to an IRA, do I do a target retirement fund, or something else?
Someone had asked what company my current 401k is with, and that is Alliance benefit group, which I had never heard of before I started working here. They have some neat tools available though...
Okay, then based off the fact that you're not really up on what funds you want to invest in, I'd suggest doing some reading...
http://jlcollinsnh.com/stock-series/
^my go-to for learning about how the market thing works, and why most of us do what we do (this is how I learned about everything. I was a total noob three year ago).
Once you've got a good grasp on how the investing thing basically works, you need to figure out your investment policy statement:
http://www.bogleheads.org/wiki/Investment_policy_statement
and then your asset allocation (basically what stuff you want to invest in):
http://www.bogleheads.org/wiki/Asset_allocation
http://www.bogleheads.org/wiki/Lazy_portfolios
And then you need to figure out if you want to go with Vanguard (the leader in index investing, hell the index fund was invented by their founder and they are not a "for profit" company), or Fidelity (which has their Spartan series of low cost/index funds to compete with Vanguard). If you do go with Fido, just be aware that while they are overall more noob friendly (easier to use and better customer service in my opinion, and lots and lots of cool tools on their website) that they are a "for profit" company and you'd just need to make clear that you're self managing. Vanguard is still the first choice around these parts, but you can do very well with Fido too if you know to avoid the higher expense ratio stuff. I have my investments with Fido and have been very happy with them.
http://www.bogleheads.org/wiki/Fidelity
^ shows the equivalent Fido funds to Vanguard
Well, that looks like I have some reading to do!
I did look up the funds that my new 401k is invested in, which includes 4 Vanguard funds - 500 index, Mid Cap Index Admiral, Small Cap Index Adm, and Total Intl Stock Index Admiral
It appears that 29% of my 401k is invested between those 4
I looked up my 1st quarter statement from Fidelity, and I can't see the exact percent of the fees.
My beginning balance in 2015 was $28,742.07
Fee's assessed were $8.98
And in the first quarter, I had a market value change of +$895.51
So, the fees that are assessed, is that based off my starting balance or ending balance?
Is this high or low?
Anywhere specifically that I can find the actual fee %? I've looked all over the site and haven't found it yet...
Is this expense ratio found per fund, or something that should be listed for my entire 401k?
I know that doesn't seem to make sense, but I'm not sure how else to word it.
Is this expense ratio found per fund, or something that should be listed for my entire 401k?
I know that doesn't seem to make sense, but I'm not sure how else to word it.
Makes perfect sense. It is specific to the fund.
And the same fund, but held in different 401k plans, can have different expense ratios in each. That is why some 401k plans are "good" and some are "bad".
So, if I'm using their own "Aggressive Strategy", I need to go fund by fund to fine the expense ratio?
Old 401k Fund YTD Return Expense Ratio Large Cap Index 3.89% 0.02% International Equity 10.23% 1.23% Internation Index 10.43% 0.07% Large Cap Value 4.18% 0.07% Large Cap Growth 6.79% 0.79% Bond Index 84.00% 0.04% Small Mid Cap Value 6.96% 1.47% Small Cap Index 4.55% 0.05% Core Plus Fund 72.00% 0.49% Small Mid Growth 7.02% 1.39% Guaranteed Fund 1.35% 0.00% Current 401k Fund YTD Return Expense Ratio Baird Intermediate Bond Fund Class Investor 0.55% Columbia Acorn R4 0.84% Voya Real Estate I 0.91% Columbia Dividened Income R4 0.77% Goldman Sachs Small Cap Value Instl 0.95% Oppenheimer Developing Markets Class Y 1.03% PIMCO Commodities Plug Strategy 0.74% PIMCO Global Bond Adm 0.80% PIMCO Moderate Duration Fund 0.56% T. Rowe Price New Horizon Fund 0.79% T. Rowe Price New America Growth 0.79% American Funds EuroPacfic R-4 0.84% JPMorgan Large Cap Growth Select 0.93% Vanguard 500 Index 0.05% Vanguard Mid Cap Index Admiral 0.09% Vanguard Small Cap Index Adm 0.09% Vanguard Total Intl Stock Index Adm 0.14% Jhancock Disciplined Value R2 1.32% JPMorgan Mid cap Value Sel 0.98% |
Here's what I've got...each fund is listed, and their expense ratio, both on my old (Fidelity) 401k and my new (Alliance Benefit Group) 401k.Well done!
Here's what I've got...each fund is listed, and their expense ratio, both on my old (Fidelity) 401k and my new (Alliance Benefit Group) 401k.Well done!
Appears the old one has the lower expense ratios, so leaving your money there (and allocating it appropriately) seems fine.
im curious if itd be worth my time to roll it over to a vanguard ira or if not, what funds should I move that money into? I dont contribute to that old 401k any more, thinking if I roll it to an ira, when the time comes and I have additional money, itd be a good investment vehichle. Thoughts? Opinions on rolling to Vanguard? Fund recommendations?The expense ratios in the old 401k are so good there is little incentive (maybe even negative incentive) to roll the money over to Vanguard.
im curious if itd be worth my time to roll it over to a vanguard ira or if not, what funds should I move that money into? I dont contribute to that old 401k any more, thinking if I roll it to an ira, when the time comes and I have additional money, itd be a good investment vehichle. Thoughts? Opinions on rolling to Vanguard? Fund recommendations?The expense ratios in the old 401k are so good there is little incentive (maybe even negative incentive) to roll the money over to Vanguard.
See http://www.bogleheads.org/wiki/Three-fund_portfolio for some generic investment thoughts.
Below are some off-the-top-of-my-head thoughts on fund allocations. The specific percentages are certainly debatable - what is more important is that you pick an asset allocation strategy and stick with it. E.g., see http://www.bogleheads.org/wiki/Asset_allocation.
Old 401k
Fund Expense Ratio Allocation
Large Cap Index 0.02% 30%
Internation Index 0.07% 20%
Bond Index 0.04% 30%
Small Cap Index 0.05% 20%
Current 401k
Fund Expense Ratio Allocation
Vanguard 500 Index 0.05% 20%
Vanguard Mid Cap Index Admiral 0.09% 30%
Vanguard Small Cap Index Adm 0.09% 30%
Vanguard Total Intl Stock Index Adm 0.14% 20%
So, I get re-allocating funds on my old 401k, but I'm curious as to why on my current one. Do those funds you recommended line up with what would be an "aggressive" mix? At 27 years old (I think..maybe I'm 28...I don't know right now), I'm okay with having some riskier investments as I have quite awhile before I'm going to be ready to retire.Oh...those long lists are the funds in which you are invested?!
So, I get re-allocating funds on my old 401k, but I'm curious as to why on my current one. Do those funds you recommended line up with what would be an "aggressive" mix? At 27 years old (I think..maybe I'm 28...I don't know right now), I'm okay with having some riskier investments as I have quite awhile before I'm going to be ready to retire.Oh...those long lists are the funds in which you are invested?!
I thought they were the list of all funds available in the 401k. You don't need to be in that many different funds. See the information in the bogleheads links.
In general, the lower the percentage of bonds the more "aggressive" the portfolio. Another interesting article is http://whitecoatinvestor.com/150-portfolios-better-than-yours/. Good luck!