Author Topic: 401k rollover  (Read 3037 times)

cj25

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401k rollover
« on: November 16, 2017, 09:45:31 AM »
If I leave my current job and need to move my 401k, what should I do with it (rolling over to new employer not an option)?  It's currently in one of those year of retirement plans (like for 2040 I think). The IRA I moved another small 401k into from another previous employer hasn't done very well, so I want to make sure I invest correctly.  Thanks!

alexpkeaton

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Re: 401k rollover
« Reply #1 on: November 16, 2017, 01:24:06 PM »
Are you asking whether you should roll it into your IRA or not? Or what you should invest it in? Why hasn't your IRA done well?

NoStacheOhio

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Re: 401k rollover
« Reply #2 on: November 16, 2017, 05:39:02 PM »
If I leave my current job and need to move my 401k, what should I do with it (rolling over to new employer not an option)?  It's currently in one of those year of retirement plans (like for 2040 I think). The IRA I moved another small 401k into from another previous employer hasn't done very well, so I want to make sure I invest correctly.  Thanks!

Those are two totally different things.

The IRA is just a tax-advantaged bucket where you keep your money. You can invest the money in there any way you like. Read this: http://jlcollinsnh.com/stock-series/

Beach_Stache

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Re: 401k rollover
« Reply #3 on: November 17, 2017, 06:23:36 AM »
Rollover to a Vanguard or Fidelity IRA so you don't pay taxes on it.  If it hasn't done well then maybe it's b/c it's currently in an employer sponsored program that charges high fees and hasn't gotten great returns.  When I left my previous jobs I rolled into the gov't TSP b/c I'm a federal employee and you can't beat the 0.03% fees!  I have post-tax and Roth IRA in Fidelity (just b/c it's been in there for a long time - I think most MMMers probably go with Vanguard - I was just too lazy to switch) and those are in an S&P index fund that only charges like 0.045% or something.  I think Fidelity is trying to keep up with Vanguard regarding the low fees.  So rollover to a Vanguard or Fidelity IRA so you aren't charged a penalty or taxes.

freedcorporateslave

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Re: 401k rollover
« Reply #4 on: November 18, 2017, 05:22:52 PM »
Do you like your current plan and does it have low management fees? You do know you can leave it in there after you leave. I was about to roll mine over to an IRA until I found out it would be vulnerable to lawsuits. 401k are usually protected.

cj25

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Re: 401k rollover
« Reply #5 on: November 20, 2017, 02:23:10 PM »
I thought you couldn't leave it in a company 401k once you leave?  It has been doing well, so I would just leave it I guess. I figured if I have to move it, roll it to a Vanguard IRA.  Right?  Not sure which type of funds to move into either.

No idea about fees in my current plan. I really don't know much about investing other than the high level basics.

NoStacheOhio

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Re: 401k rollover
« Reply #6 on: November 21, 2017, 05:58:57 AM »
I thought you couldn't leave it in a company 401k once you leave?  It has been doing well, so I would just leave it I guess. I figured if I have to move it, roll it to a Vanguard IRA.  Right?  Not sure which type of funds to move into either.

No idea about fees in my current plan. I really don't know much about investing other than the high level basics.

You just can't add new money to an old 401k.

You should really read up on the various types of retirement accounts, figure out your fees, and come up with an investing plan.

freedcorporateslave

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Re: 401k rollover
« Reply #7 on: November 21, 2017, 09:39:22 PM »
I thought you couldn't leave it in a company 401k once you leave?  It has been doing well, so I would just leave it I guess. I figured if I have to move it, roll it to a Vanguard IRA.  Right?  Not sure which type of funds to move into either.

No idea about fees in my current plan. I really don't know much about investing other than the high level basics.

Yes you can. You will be getting a documentation package from the plan manager after you leave that will explain your options. Don't sweat this right now, if you are going to leave focus on making your new life change a success and worry about the 401k after you get the documentation. When you're ready NoStacheOhio gave some great advice, this is a great opportunity to learn more about investing and apply what you learn.

ChpBstrd

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Re: 401k rollover
« Reply #8 on: November 28, 2017, 02:07:39 PM »
Set up a "rollover IRA" with an online brokerage. Shop around for new account bonuses and low transaction costs.

Contact customer service of your new brokerage. Ask for specific instructions to roll over your 401k without incurring taxes.

Follow their instructions. On every call, emphasize that you are doing a rollover and do not want to incur taxes.

Once the money is in your new account, buy as many shares of VTI as you can. Then set dividends to reinvest (may be called a DRIP in their system).

Next, leave this account alone.