Author Topic: Changing Jobs and Retirement Accounts... HELP!  (Read 1703 times)

lbess

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Changing Jobs and Retirement Accounts... HELP!
« on: August 31, 2015, 06:55:48 AM »
Hi everyone,

So I am starting a new job (public school teacher) in a few days and I am wondering what I should do about my Roth 401K from my previous employer. Here is the breakdown of my current retirement accounts.

Roth IRA Vanguard: 4500.00 (this was rolled over from a prior 403B and is currently invested all in VTSMX)
Roth 401K OneAmerica: 6,000.00 of my money and around 1500.00 of my previous employer's match that I can take (I am only 66% vested)

At my new job I will contribute to my mandatory pension (6% of my salary) and also have a 403B, which offers Vanguard index funds. I plan on maxing out  both the IRA and the 403B in 2016 once my spouse starts working.

So my questions are:

1)Should I do a direct rollover from my Roth 401K to my Roth IRA? I believe this transaction is tax free b/c they are both Roth although I'm not sure if the employer contribution is considered as Roth.
2) Should I roll over the funds into the new 403B instead? I think this may be more problematic b/c the 403B is not Roth...
3) Do I have a limit of how many rollovers I can do in a year for my Roth IRA? I rolled over the previous 403B back in May and I'm not sure if I can rollover another one or not...
4) If I spread my portfolio across several accounts should I aim for balance among all? For example if I do the Vanguard three fund "lazy  portfolio" does it matter if my Roth IRA only has VTSMX and I have the two other funds in my 403B?

Any advice or ideas will be greatly appreciated! Thanks :)

Cromacster

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Re: Changing Jobs and Retirement Accounts... HELP!
« Reply #1 on: August 31, 2015, 07:07:06 AM »
1)Should I do a direct rollover from my Roth 401K to my Roth IRA? I believe this transaction is tax free b/c they are both Roth although I'm not sure if the employer contribution is considered as Roth.
Correct, there would be no tax here.  Some institutions will charge a transfer fee, so you would have to check with Onamerica or whoever.

2) Should I roll over the funds into the new 403B instead? I think this may be more problematic b/c the 403B is not Roth...
This might be something to consider, but this is largely dependent on your tax situation.  For FIRE it is generally accepted that traditional IRA/401/403 is better tax wise.  But everyone's situation is different.  Personally, I would just leave it as is.

3) Do I have a limit of how many rollovers I can do in a year for my Roth IRA? I rolled over the previous 403B back in May and I'm not sure if I can rollover another one or not...
I don't believe so, but others may have more experience here.

4) If I spread my portfolio across several accounts should I aim for balance among all? For example if I do the Vanguard three fund "lazy  portfolio" does it matter if my Roth IRA only has VTSMX and I have the two other funds in my 403B?
Yes, that is fine to balance your AA that way.

johnny847

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Re: Changing Jobs and Retirement Accounts... HELP!
« Reply #2 on: August 31, 2015, 07:11:37 AM »
Yes direct rollover from Roth 401k to Roth IRA is your best bet. But I'm pretty sure employer match has to be put in a traditional 401k by law. So that should go to a traditional IRA unless the index funds in your new 403b actually have lower expense ratios than what you can find at Vanguard

No don't rollover to 403b. I don't know why you'd want to rollover Roth to traditional anyway. So you want to pay tax upon contribution and withdrawal?

There is no limit on how many workplace retirement plan to IRA rollovers you can do in a year.

No, treat all your accounts as just part of one big portfolio. With that logic you'd end up with bonds in a taxable which is generally not advised.

lbess

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Re: Changing Jobs and Retirement Accounts... HELP!
« Reply #3 on: September 01, 2015, 05:16:29 PM »
Thanks for the advice! I will start the rollover process with Vanguard asap :)