Roll over 401k to new 401k?

[jmr5x]

I will have the same position at my current employer but through a different company starting this week.  I am new to investing and would like some advice on what to do with my current nationwide 401k.  The new company will have a Vanguard 401k.  I am thinking that just rolling over my 7,000 dollars would be my best bet.  Is this what a proper mustacian would do?

[seattlecyclone]

It really depends. If your old 401(k) has some high-fee funds, you definitely don't want to leave the money there. You can roll it into an IRA or your new 401(k).

The main things to consider here are:

• Fund selection. Some 401(k) plans, especially at larger companies, will offer institutional class funds that have lower expense ratios than you can get on your own. If this is the case for your new 401(k), you may lean toward rolling your money in there. An IRA, while it doesn't have institutional shares available, lets you invest in whatever funds you want, instead of whatever your employer selects. If your new 401(k) has higher-fee funds, you may want to lean toward rolling the money into an IRA instead.
• Backdoor Roth eligibility. If your income is high enough that you can't make regular contributions to a Roth IRA, you may want to make "backdoor" contributions. To do this, it's best if you have no pre-tax money in a traditional IRA. If this is you, you may lean toward rolling the money into your new 401(k) so that the backdoor Roth is still an option. If your income is low enough to make regular contributions, this consideration doesn't matter.