Author Topic: New 401k transfer old or not??  (Read 956 times)

exige

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New 401k transfer old or not??
« on: May 22, 2019, 05:31:48 PM »
Hi all!

I am about to get my new 401k finally setup at my new job... and I normally just transfer the old one over and continue on my way. However, This last job my 401k was with Vanguard so it is making me wonder if it would be best to just roll it into a traditional and leave it with Vanguard and just start my new one with (transamerica) from scratch. I cant seem to find any reason this would be positive or negative other then maybe harder to deal with AA?


Luckily our Transamerica options are decent they have a VTSMX option etc. If it makes any difference my wife and I have our Roth accounts through vanguard as well so I am always on their site etc.

dandarc

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Re: New 401k transfer old or not??
« Reply #1 on: May 22, 2019, 05:37:30 PM »
If you have a substantial balance, you can usually just leave the 401K where it is if you're happy with it. Sometimes 401K's will give you access to institutional class shares at Vanguard - even cheaper than Admiral.

No idea if this is your situation, but if you need to now, or thing you will need to do a Backdoor Roth IRA contribution, then you need to have a plan for dealing with any tIRA money out there. Leaving the 401K where it is or transferring to your new 401K would probably be the best bet if that is a consideration.
« Last Edit: May 22, 2019, 07:16:35 PM by dandarc »

exige

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Re: New 401k transfer old or not??
« Reply #2 on: May 22, 2019, 07:08:55 PM »
The options actually are better in the old 401k but not by much and it's only about 45k

appleshampooid

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Re: New 401k transfer old or not??
« Reply #3 on: May 23, 2019, 06:03:24 AM »
No idea if this is your situation, but if you need to now, or thing you will need to do a Backdoor Roth IRA contribution, then you need to have a plan for dealing with any tIRA money out there. Leaving the 401K where it is or transferring to your new 401K would probably be the best bet if that is a consideration.
Agreed on considering the future backdoor Roth options.

Another thing to consider is if the old 401(k) will start charging you a service or maintenance fee now that you are separated from the employer. This is sometimes the case. The employer will cover the fee while you are still an employee, but once you separate the fee becomes your responsibility. It's all plan-by-plan so you may have to read the fine print, or just wait a quarter or a year to see if any fees hit.

All things considered, I would transfer it to the new 401(k). A bit of paperwork now, and you have one fewer account to keep track of and manager you AA across.

exige

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Re: New 401k transfer old or not??
« Reply #4 on: May 23, 2019, 08:07:08 AM »
I think I will most likely just end up transferring it. Now that I see the options are not that terrible in the new one I am less concerned than I was previously. I have not looked into a backdoor Roth much but it will be something I will consider so thanks for that heads up as well.

MustacheAndaHalf

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Re: New 401k transfer old or not??
« Reply #5 on: May 23, 2019, 08:53:14 AM »
Are you already maxing out your 401(k) contributions?  Until that point, a backdoor Roth doesn't make much sense.  People use a backdoor Roth after they've maxed out their 401(k) and IRA contributions, and want to save even more.

If you don't plan on doing a backdoor Roth, there's a third option: transfer from your old 401(k) into a Traditional IRA.  If you like the choices at Fidelity or Vanguard, you could do a "direct roll over" of the 401(k).  Then you could pick the investments inside your Traditional IRA.

Boofinator

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Re: New 401k transfer old or not??
« Reply #6 on: May 23, 2019, 09:06:00 AM »
If you don't plan on doing a backdoor Roth, there's a third option: transfer from your old 401(k) into a Traditional IRA.  If you like the choices at Fidelity or Vanguard, you could do a "direct roll over" of the 401(k).  Then you could pick the investments inside your Traditional IRA.

This would be my suggestion. Keep Vanguard, but be able to assert more control through an IRA.

dandarc

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Re: New 401k transfer old or not??
« Reply #7 on: May 23, 2019, 10:41:50 AM »
Are you already maxing out your 401(k) contributions?  Until that point, a backdoor Roth doesn't make much sense.  People use a backdoor Roth after they've maxed out their 401(k) and IRA contributions, and want to save even more.their income is too high to make regular Roth IRA contributions
Fixing. Backdoor Roth is not to be confused with MegaBackdoor Roth, which is to save above and beyond the standard limits for deferrals and IRA's.

exige

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Re: New 401k transfer old or not??
« Reply #8 on: May 23, 2019, 08:13:23 PM »
I posted this on bogleheads as well and one user mentioned it might be smart to keep the 401k where it is as long as there are no crazy fees for no longer being employed by the company and use it for my bond allocation and fill in the rest and slowly adjust the AA as my investments increase. I will be maxing my 401k since someone asked earlier.

The old 401k is some of the best possible options available from vanguard so once I find out about fees that might be how I go. The new one has much worse options but at least has the decent vtsmx option. This adds a 3rd account to deal with but my wife and my Roth accounts are already theoufh vanguard so not much added work.

I can't answer much on backdoor Roth's I have not looked into it since this will be the first year I max the 401k. I had no idea rolling to an IRA would impact it even.

tralfamadorian

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Re: New 401k transfer old or not??
« Reply #9 on: May 26, 2019, 01:43:41 PM »
Hi all!

I am about to get my new 401k finally setup at my new job... and I normally just transfer the old one over and continue on my way.

Always rollover 401k into your new job(if they allow, some don't unless its at a certain $ amount)

Why?