Author Topic: Rollover (old) 401k to Traditional IRA  (Read 516 times)

MoneyGoal

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Rollover (old) 401k to Traditional IRA
« on: March 02, 2019, 12:18:39 PM »
Hi,

I left my job about 1 year ago and I did not do anything to my 401k. The 401k is with Fidelity.
Should I rollover to Traditional IRA? Is IRA always better than 401k in terms of cost? Based on what I found online, 401k fees are higher than Traditional IRA.
If I rollover to IRA, should I keep it in Fidelity, Vanguard or Betterment (I have accounts in these 3 companies)?
Rolling over from 401k to IRA should not have any tax consequences, right?

Is there anything else that I should look out for?

Thanks!

dandarc

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Re: Rollover (old) 401k to Traditional IRA
« Reply #1 on: March 02, 2019, 02:07:56 PM »
If you're worried about fees, Betterment is a mistake.

Fees in 401Ks vary - some plans have very good investment options, better than you can get on your own. Others have much worse investment options.

If you do rollover, either Vanguard or Fidelity offer very good, low cost index funds - either choice is a good one. I personally would go with Vanguard, but Fidelity is great too, if you choose there low-cost funds.

If you think you'll want / need to do a backdoor Roth IRA any time soon, you might leave the money in the 401K - tIRA money gets in the way of doing that.

harvestbook

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Re: Rollover (old) 401k to Traditional IRA
« Reply #2 on: March 02, 2019, 03:24:36 PM »
What funds are you using in your 401K? If you are forced into funds with higher-cost expense ratios, then it's worth it to roll over and use low-cost options. If you are in index funds with ER below .05 percent, it might not be worth a change unless you just want fewer accounts to keep up with. I just did one with Vanguard and it was very simple.

MDM

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Re: Rollover (old) 401k to Traditional IRA
« Reply #3 on: March 02, 2019, 05:57:50 PM »
Is there anything else that I should look out for?
Perhaps pro-rata issues should you want to do use the Backdoor Roth process.  E.g., if your income will be above the Roth contribution limit.