Author Topic: Is there any reason why i need to rollover my old 403(b)s?  (Read 3809 times)

nereo

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Is there any reason why i need to rollover my old 403(b)s?
« on: October 28, 2014, 11:54:33 AM »

conventional and often repeated wisdom is to roll over retirement plans from previous employers. 
However, I have one small account (~$5800) from many years ago in a 403(b) account from a job I had for one year.  It's in an a low fee index fund that I'm happy with (i think the fee is ~ 0.2%).
I've ignored it for years simply because it was a fairly small chunk of change and shifting it wasn't a priority.

So - would I gain anything (except a miniscule ~0.1% or ~$6/yr reduction in fees) by rolling it over?  More specifically, am I missing any advantages tax-wise by not putting it into either my IRA or ROTH?


GGNoob

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #1 on: October 28, 2014, 12:27:00 PM »
If it was me, even if I won't save much on fees, I'd roll it over just to have less accounts to take care and keep track of.

nereo

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #2 on: October 28, 2014, 12:59:54 PM »
If it was me, even if I won't save much on fees, I'd roll it over just to have less accounts to take care and keep track of.
yeah, i see your point, but right now I don't do anything with it.  It just sits there and about once a year I remember I have it and that's it - ironically rolling it over would take more work than i give it every five years (even though rolling over is a fairly simply process).

solon

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #3 on: October 28, 2014, 02:13:53 PM »
If you have a series of jobs, as many do, eventually you will have several of these small accounts all over the place. Better to roll them into a single IRA as you go. IMHO. YMMV.

Gone Fishing

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #4 on: October 28, 2014, 02:19:06 PM »
If you have a low/no income year on the horizon, you can roll it into a ROTH then and pay very little in taxes.

solon

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #5 on: October 28, 2014, 02:21:33 PM »
If you have a low/no income year on the horizon, you can roll it into a ROTH then and pay very little in taxes.

That's a really good idea. I may be able to that myself, soon.

skyrefuge

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #6 on: October 28, 2014, 03:27:08 PM »
ironically rolling it over would take more work than i give it every five years (even though rolling over is a fairly simply process).

Yeah, rolling it over now would be more work than keeping it there, but would it be more work than when, 30 years from now, you have forgotten about it, and then you remember it in a dream, but the investment company holding it has been bought out three times, your former employer went out of business 10 years earlier, they no longer have your address and can't verify who you are, and you have to spend 10 hours over three days on telepathic comm-links with unhelpful people on six different planets, including a trip to The Capital in Nunavut to retrieve your identity records?

nereo

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #7 on: October 28, 2014, 06:08:19 PM »
ironically rolling it over would take more work than i give it every five years (even though rolling over is a fairly simply process).

Yeah, rolling it over now would be more work than keeping it there, but would it be more work than when, 30 years from now, you have forgotten about it, and then you remember it in a dream, but the investment company holding it has been bought out three times, your former employer went out of business 10 years earlier, they no longer have your address and can't verify who you are, and you have to spend 10 hours over three days on telepathic comm-links with unhelpful people on six different planets, including a trip to The Capital in Nunavut to retrieve your identity records?
Funny, I was in the Nunavut capitol (Iqualut) just a few weeks ago. 
Ok, the combination of paying a low amount of taxes in 2015 (I'm already expecting reduced income) and the comfort of not having to track down the company that bought the company that bought my investment in 203X has convinced me.  Jan 2015 I'll roll over into my ROTH.
Cheers and thanks for all the good reasons
N

teen persuasion

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #8 on: October 29, 2014, 06:08:43 AM »
ironically rolling it over would take more work than i give it every five years (even though rolling over is a fairly simply process).

Yeah, rolling it over now would be more work than keeping it there, but would it be more work than when, 30 years from now, you have forgotten about it, and then you remember it in a dream, but the investment company holding it has been bought out three times, your former employer went out of business 10 years earlier, they no longer have your address and can't verify who you are, and you have to spend 10 hours over three days on telepathic comm-links with unhelpful people on six different planets, including a trip to The Capital in Nunavut to retrieve your identity records?

Doesn't take thirty years for things to get messed up, either.  DH left his 401k with a former employer; actually, his employer went out of business, but a parent firm controlled it.  The service provider changed a few times, and I finally convinced him to move it.  The newest service provider thought that he wasn't fully vested (they were all fully vested when it went out of business), so he would lose a portion.  He had to contact the parent company to get it straightened out, and was extremely lucky that the person answering the phone had been a coworker and knew the details.  She got the records corrected.

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #9 on: October 29, 2014, 07:05:05 AM »
ironically rolling it over would take more work than i give it every five years (even though rolling over is a fairly simply process).

Yeah, rolling it over now would be more work than keeping it there, but would it be more work than when, 30 years from now, you have forgotten about it, and then you remember it in a dream, but the investment company holding it has been bought out three times, your former employer went out of business 10 years earlier, they no longer have your address and can't verify who you are, and you have to spend 10 hours over three days on telepathic comm-links with unhelpful people on six different planets, including a trip to The Capital in Nunavut to retrieve your identity records?

Doesn't take thirty years for things to get messed up, either.  DH left his 401k with a former employer; actually, his employer went out of business, but a parent firm controlled it.  The service provider changed a few times, and I finally convinced him to move it.  The newest service provider thought that he wasn't fully vested (they were all fully vested when it went out of business), so he would lose a portion.  He had to contact the parent company to get it straightened out, and was extremely lucky that the person answering the phone had been a coworker and knew the details.  She got the records corrected.

Along these lines, my wife had 3 orphan retirement accounts from various jobs.  I harped on her for over a year to get them consolidated before she finally did it.  Of the three, one company's sole owner was dead, and the other had a wrong SS# for her and had had so much turn over that there was only one owner still around that even knew her and could help get things fixed, but he was too busy with other things to get around to it for at least a month or two.  10 hours of work was probably about right. 

TomTX

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #10 on: October 29, 2014, 10:16:18 AM »
Roll it over! Quit being lazy.

nereo

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #11 on: October 29, 2014, 11:14:45 AM »
Roll it over! Quit being lazy.
yes, as I mentioned earlier in this thread I've decided to roll it over in Jan 2015 (for tax purposes).
However, I'd liek to think that "being lazy" has been my absolute best strategy.  I auto-invest into my Vanguard index fund every two weeks.  I don't change or alter it, except to increase the contributions whenever possible.  This "lazy" approach means I've ignored the mass hysteria that comes both from falling and surging markets - not because of any inherent qualities on my part, but simply because i take the lazy road.

skyrefuge

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #12 on: October 29, 2014, 01:11:40 PM »
Funny, I was in the Nunavut capitol (Iqualut) just a few weeks ago.

Ha, crazy. I wasn't even sure I'd spelled 'Nunavut' right 'til Firefox declined to complain. Well, at least you'll be one of the rare few familiar with the area when the Sino-Martian Alliance claims it as their power-base in the post-glacial Earthruin.
 
Ok, the combination of paying a low amount of taxes in 2015 (I'm already expecting reduced income) and the comfort of not having to track down the company that bought the company that bought my investment in 203X has convinced me.  Jan 2015 I'll roll over into my ROTH.

Is your income/taxes really going to be that low? Usually people wouldn't convert a Traditional IRA to a Roth IRA until their income-from-labor reaches retirement levels, and only then in order to access the money without penalty before age 59.5. If that's you, then cool, but otherwise, you might just want to roll your 403(b) over to a Traditional IRA (which you can do immediately), and do the Roth conversion only when you need to.

nereo

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Re: Is there any reason why i need to rollover my old 403(b)s?
« Reply #13 on: October 29, 2014, 02:15:18 PM »

Is your income/taxes really going to be that low? Usually people wouldn't convert a Traditional IRA to a Roth IRA until their income-from-labor reaches retirement levels, and only then in order to access the money without penalty before age 59.5. If that's you, then cool, but otherwise, you might just want to roll your 403(b) over to a Traditional IRA (which you can do immediately), and do the Roth conversion only when you need to.
Yes - US income levels in 2015 should be extremely low.  Basically living/working outside the US allows me to convert from into ROTH with the lowest possible taxes.  Have to wait until 2015 though. Thanks.