Where to Roll Over 401K?

[oldtoyota]

Hi all--

I am wondering how to calculate the best place to roll over my 401K. My options appear to be:

1. Move it into current employer plan (I dug into the fine print and see that I pay $300/year for this plan and this price goes up as my $$ increases.)
2. IRA: I would not have to pay tax on the amount. I would get taxed when I am retired.
3. Roth: If I qualify for this, I would pay tax now and not later.
4. Leave as is. It is invested in a Vanguard fund that's recently been earning 8%. I do not have the numbers in front of me. IIRC, it's been earning 8% at least this calendar year. I do have to wonder if it makes sense to move this at all given the performance. However, I am NOT sure how much I am paying Great West every year for this account.

I am thinking of investing this in the much-talked-about VTSAX Admiral shares. The roll over amount would allow me to get the lowest load possible for VTSAX, and I think the fund is for me for a lot of reasons.

Thoughts? Anything I am missing?

[willn]

I suggest a Vanguard or Fidelity rollover IRA. Try to do a direct transfer so you don't see the money and possibly risk getting taxed because you miss the reinvestment deadline.   

 Some will recommend converting it to a Roth but you will pay tax on the gain. Roth is not a bad option if you are young and in a low tax bracket but you'll probably write a check for taxes so you'll need some cash. 

Since most employer plans don't have more than a dozen or so funds to choose I've avoided that route. My current employer actually provides access to Schwab but those cost more in fees to invest in than the default mutual funds.

[aj_yooper]

IMO, I would transfer the money to a Vanguard rollover IRA.  Call Vanguard when you are line and they can do the paperwork immediately; they will then do the transfer.  You can pick your fund(s) at the same time.  I have done it this way and found it to be very simple.

[oldtoyota]

I suggest a Vanguard or Fidelity rollover IRA. Try to do a direct transfer so you don't see the money and possibly risk getting taxed because you miss the reinvestment deadline.   

 Some will recommend converting it to a Roth but you will pay tax on the gain. Roth is not a bad option if you are young and in a low tax bracket but you'll probably write a check for taxes so you'll need some cash. 

Since most employer plans don't have more than a dozen or so funds to choose I've avoided that route. My current employer actually provides access to Schwab but those cost more in fees to invest in than the default mutual funds.

I hear you on the employer-sponsored funds.

I wish someone would figure out a way to let the individual invest directly with Vanguard for their 401K, etc.

We can invest in Vanguard via our employer, but it's annoying to pay $300 for a middleman company to "manage" the accounts.

To move my $$ from the old employer plan, I will basically be rolling over from Vanguard managed by Great West to Vanguard. That seems dumb to me.

[oldtoyota]

IMO, I would transfer the money to a Vanguard rollover IRA.  Call Vanguard when you are line and they can do the paperwork immediately; they will then do the transfer.  You can pick your fund(s) at the same time.  I have done it this way and found it to be very simple.

Good to know. Thank you. I looked into doing it online and then got to the end where I got stopped by a technical issue. If I talk to someone, it'll probably be a lot easier.

[aj_yooper]

You will probably have another job change sometime in the future so you will need to move your current 401k to a rollover account; otherwise you will have a series of dormant 401k s.  If you start a rollover IRA now, Vanguard can become your 'final resting place for 401k s' when you reach FI.  If your monies are then consolidated, it makes it easier to qualify for lower fees on your chosen funds so investing expenses decrease.

Also, how much does your old custodian charge to watch your money grow in Vanguard?  Is that a smart way to do stuff?

[oldtoyota]

You will probably have another job change sometime in the future so you will need to move your current 401k to a rollover account; otherwise you will have a series of dormant 401k s.  If you start a rollover IRA now, Vanguard can become your 'final resting place for 401k s' when you reach FI.  If your monies are then consolidated, it makes it easier to qualify for lower fees on your chosen funds so investing expenses decrease.

Also, how much does your old custodian charge to watch your money grow in Vanguard?  Is that a smart way to do stuff?

It is not smart at all, so I am changing that now. In the past, I was ignorant about the costs of the middleman.

Do the fees go down when money is consolidated into one fund? Or do fees go down because I would have X invested overall in lots of funds?

[aj_yooper]

Each fund has levels of ER unique to the fund and the amount you invest in it.  Vanguard offers benefits to you based on your total portfolio value-not huge, but something.

[Rebecca Stapler]

IMO, I would transfer the money to a Vanguard rollover IRA.  Call Vanguard when you are line and they can do the paperwork immediately; they will then do the transfer.  You can pick your fund(s) at the same time.  I have done it this way and found it to be very simple.

Good to know. Thank you. I looked into doing it online and then got to the end where I got stopped by a technical issue. If I talk to someone, it'll probably be a lot easier.

Vanguard's rollover customer service reps are extremely helpful. Probably the most helpful customer service people I have talked to in a long time. They want your money, so they'll help you navigate the technical issues. We rolled over state pensions from two different states and an old employer 403(b) -- there were some issues along the way, and they figured out how to fix them (even kind of skirting some Vanguard minimum investment rules by putting a note on the account that another account was getting rolled into it, which would meet the minimum investment. By the time the second account rolled in, the original balance had earned so much that it satisfied the minimum investment!)