Author Topic: What to do with an old 401k  (Read 2193 times)

iampatriciag

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What to do with an old 401k
« on: July 04, 2014, 02:15:30 PM »
It's taken a little while to get all the necessary information onto 1 page but now that it's here, my husband and I are trying to figure out what to do with an old 401k.

He is currently contributing to a TSP with this balance:
L fund (lifecycle) 2040 - $13k
L fund (lifecycle) 2050 - $13k
Int'l Stock Index - $178 (??)
Avg ER (for 2013): 0.029% but this seems to change every year - the highest since 2000 was 0.1%, the lowest 0.015%

An old 401k from a previous job is invested through Wells Fargo:
Custom Retirement Target Date 2045 - $38k  (0.5% ER)
Int'l Company Stock Fund - $38k  (0.67% ER)
Bond Fund - ~$3k (0.45% ER)


What would you do with this old 401k?  We don't seem to have many options within the TSP, but there must be better options besides leaving it as is.

We don't have huge FIRE ambitions but want to be investing wisely as much as possible.


 

wtjbatman

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Re: What to do with an old 401k
« Reply #1 on: July 05, 2014, 05:07:28 AM »
Roll it over into a Traditional IRA at Vanguard. Invest the money in a Vanguard Target Retirement Fund that meets your Asset Allocation requirements (ie 80% stocks/20% bonds). Your new expense ratio will be a third of what it is in that Wells Fargo 401k. And FWIW, if you invest in the right Target Retirement Fund, you don't need to put money into separate international or bond funds. That's what the Target Retirement Fund does for you.

Mr. Frugalwoods

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Re: What to do with an old 401k
« Reply #2 on: July 05, 2014, 05:20:57 PM »
Roll it into an IRA.  You get your choices of low cost funds.  But more importantly is that old 401ks have a nasty habit of starting to charge extra fees as time goes on.  Lots of companies are adding this to their plans, and they won't always notify ex-employees of plan changes. 

I've most recently seen this in a friend's old 401k.  3 years after he left that job, suddenly he was being charged $25/quarter as a maintenance fee.

iampatriciag

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Re: What to do with an old 401k
« Reply #3 on: July 05, 2014, 06:44:31 PM »
Thanks! Yeah, it looks like we've been paying $13 and change per quarter, so that needs to stop! 

Why an IRA?  Could we roll it into the TSP?

TomTX

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Re: What to do with an old 401k
« Reply #4 on: July 06, 2014, 07:32:59 AM »
Thanks! Yeah, it looks like we've been paying $13 and change per quarter, so that needs to stop! 

Why an IRA?  Could we roll it into the TSP?

I just googled "rollover into TSP" and the first link is directly to the TSP page on that topic:

https://www.tsp.gov/planparticipation/transfers/methods.shtml

Joel

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Re: What to do with an old 401k
« Reply #5 on: July 06, 2014, 10:40:54 AM »
I would roll it over into your tsp. The tsp has some of the lowest expense ratios available.