Author Topic: Should I roll over my 401(K)s?  (Read 2328 times)

Frugal Vegan Mom

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Should I roll over my 401(K)s?
« on: March 04, 2013, 02:16:03 PM »
I'm currently a stay at home mom but have two 401(k)s from former employers.  Each account has about $30,000 and is invested in their 2045 "target fund", with a return of about 10% over the past 3 years. 

One is through Charles Schwab, the other through ING.  Should I just leave them be?  Any advantage to rolling over, or re-allocating my funds?

Thanks, total investing newbie here if you couldn't tell  ;-). 

icefr

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Re: Should I roll over my 401(K)s?
« Reply #1 on: March 04, 2013, 02:43:49 PM »
What are the expense ratios on each of these 2045 target funds? Are there any fees for leaving the 401(k)s there while you are no longer working for the company? I know that my 401(k) plan charges such a fee, quarterly.

For example, the Vanguard 2045 target date fund [1] has an expense ratio of 0.18% and is about 90% stocks / 10% bonds with about 70% US / 30% international stocks. The underlying funds are all index funds.

The ING one I found looks like it has actively managed funds as the underlying ones and the total expense ratio is around 1.04%? The Schwab one I found is around 0.82%.

I would say that is probably worth it to roll them over because then you would only have one account (a Rollover IRA) instead of the two 401(k)s and you can lower your expenses. If you're happy with the target date funds, I would stick to a target date fund when you rollover, but find somewhere (like Vanguard) that has low expenses. On a $60,000 balance, you would save about $384/year going with Vanguard's target date funds instead of Schwab's.

[1] https://personal.vanguard.com/us/funds/snapshot?FundId=0306&FundIntExt=INT
[2] http://www.ingfunds.com/RetirementPortfolios/profile/index.htm?f=183&fsc=896&tab=Portfolio
[3] http://hosted.rightprospectus.com/SF/Fund.aspx?dt=P&cu=808509194

BYUvol

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Re: Should I roll over my 401(K)s?
« Reply #2 on: March 04, 2013, 03:09:58 PM »
I'm currently a stay at home mom but have two 401(k)s from former employers.  Each account has about $30,000 and is invested in their 2045 "target fund", with a return of about 10% over the past 3 years. 

One is through Charles Schwab, the other through ING.  Should I just leave them be?  Any advantage to rolling over, or re-allocating my funds?

Thanks, total investing newbie here if you couldn't tell  ;-).

What state do you live in? In certain states, 401(k)s are better protected from liability than IRAs.

Frugal Vegan Mom

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Re: Should I roll over my 401(K)s?
« Reply #3 on: March 09, 2013, 11:37:56 AM »
Icefr, thank you so much for that information, I really, really appreciate it.  The details and links were very helpful!!

We live in MN, not sure how much that would impact my decision?