Author Topic: Why did I choose to do my 401k rollover this week?  (Read 966 times)

volleyballer

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Why did I choose to do my 401k rollover this week?
« on: March 14, 2020, 03:21:38 PM »
I did something incredibly, ridiculously, unfathomably stupid this week. I decided that this week, of all weeks, was when I was going to begin the rollover process for my old 401k to current employer's 401k. I wasn't trying to do any market timing, I was just completely ignorant of the fact that my money would be out of this extremely volatile market for a short period of time, and didn't really grasp how badly the shtf in the markets this week. At least the transaction cleared on Friday (+ 9% rally) instead of Thursday. To make matters worse, they actually have to mail me a paper check (payable to new provider fbo my name) to physically deliver to my employer, for employer to approve a form and physically deliver to new provider, per my new employer's Byzantine rules. The Roth portion is going to my Roth IRA provider directly, but even that might be a paper check too for all I know.

Not even sure if I'm asking for advice at this point, there's probably nothing I can do about it now but lament in anonymity on the mmm forums and hope we don't have a huge market rally this week before I get reinvested. And I realize people are dying of this coronavirus so this is far from the worst thing that can happen to me, but wtf I was incredibly stupid. That is all. I'm going to go lick some subway handrails in NYC now.

NotJen

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Re: Why did I choose to do my 401k rollover this week?
« Reply #1 on: March 14, 2020, 03:38:11 PM »
I did the same thing!  I noticed that my final employer profit sharing contribution had hit my account, and I got so excited about rolling it over before the next round of admin fees hit, that I did not consider how stressful it would be to be out of the market with all this volatility going on!

I feel like such a dummy!

I called last Friday after market close to initiate, and the sale happened Monday, after a giant drop.  I was pretty devastated at the loss - especially since I had gone through the motions on Thursday, but didn't finalize the transaction since they were forcing me to call in.

I am pretty lucky, and the check was sent directly to Vanguard (not to me), and it actually arrived yesterday!  I didn't buy back in yet, because I hadn't done all the math I needed to do by market close (I'm considering tax loss harvesting and a Roth conversion, so I didn't want to make another dumb decision).  But I'm set for Monday to get reinvested, and have at least some glimmer of hope that I might come out even-ish in the end.

volleyballer

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Re: Why did I choose to do my 401k rollover this week?
« Reply #2 on: March 15, 2020, 04:32:42 PM »
Good luck! I guess there's nothing we can do besides get back in asap. I hope we both come out unscathed (and Corona virus free!)


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2Birds1Stone

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Re: Why did I choose to do my 401k rollover this week?
« Reply #3 on: March 15, 2020, 06:09:26 PM »
Don't feel bad, hold the cash. The market has a long way to fall in the coming months before any kind of relief. This may be a blessing in disguise.

NotJen

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Re: Why did I choose to do my 401k rollover this week?
« Reply #4 on: March 16, 2020, 02:28:49 PM »
Don't feel bad, hold the cash. The market has a long way to fall in the coming months before any kind of relief. This may be a blessing in disguise.

I'm back in as of close today.  Wish I could gamble on the market going lower (I'm sure it will), but I don't have the stomach for it.

dandarc

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Re: Why did I choose to do my 401k rollover this week?
« Reply #5 on: March 16, 2020, 02:42:40 PM »
Not going to feel that way for a while, but this could work out big time in your favor. I was out of the market for 1 day a few years ago with my 401K changing to new funds and was stoked I got $6,000 extra shares - was one of the largest down days in quite some time. The triggering event for me was noticing that eTrade, where I have my soloK, started offering the good Schwab funds as no-transaction-fee - so I just sold everything one day and bought the good funds the next day. Market was down 2 or 3% that day.

Whole account with the market crashing like this? You could double your money if it keeps going down. Here's hoping the transaction goes through at a favorable time for you!

volleyballer

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Re: Why did I choose to do my 401k rollover this week?
« Reply #6 on: March 16, 2020, 05:07:53 PM »
Don't feel bad, hold the cash. The market has a long way to fall in the coming months before any kind of relief. This may be a blessing in disguise.

I'm back in as of close today.  Wish I could gamble on the market going lower (I'm sure it will), but I don't have the stomach for it.
I don't have the stomach for it either. Sounds like at least you missed today's bloodbath. I was out as of Friday close, so I hit the gains on Friday and missed today's losses. I'm back in as soon as the checks clear, then letting it ride and not looking back. Hopefully sometime this week so I can stop obsessing over this, as if my worrying would help any.

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NotJen

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Re: Why did I choose to do my 401k rollover this week?
« Reply #7 on: March 16, 2020, 06:10:21 PM »
I don't have the stomach for it either. Sounds like at least you missed today's bloodbath. I was out as of Friday close, so I hit the gains on Friday and missed today's losses. I'm back in as soon as the checks clear, then letting it ride and not looking back. Hopefully sometime this week so I can stop obsessing over this, as if my worrying would help any.

I think your timing might work out okay.  I was out for exactly 1 week, and "saved" myself $41k.

Joel

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Re: Why did I choose to do my 401k rollover this week?
« Reply #8 on: March 16, 2020, 11:15:13 PM »
I was hoping to roll over two different 401ks as I just started a new job. At this point, I canít do it until April, so itís just a waiting game to see where things are at. Donít really want to risk the volatility...

VaCPA

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Re: Why did I choose to do my 401k rollover this week?
« Reply #9 on: March 17, 2020, 07:08:11 AM »
You'll probably come out ahead, by sheer luck. I almost accidentally timed the market back in 2016 when we were buying our house. I took out a 50k 401k loan so we'd have 20% down payment. We were going to be able to pay it back pretty quickly, as soon as our townhouse sold. So it would only be out a month or so. After I took the loan out the market took a big dip, I can't remember why at this point but I think it might've been election/Trump related. I was really hoping it would keep dipping and I could pay back the loan cheap but the market recovered well before then.

volleyballer

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Re: Why did I choose to do my 401k rollover this week?
« Reply #10 on: March 20, 2020, 02:04:20 PM »
Well folks, I'm back in as of cob today. Although I did benefit from inadvertent market timing,  "selling" higher last Friday and "buying" lower today, I would submit this as a cautionary tale on 401k rollovers. Make sure you understand the mechanics of the rollover between the previous 401k provider, new 401k provider, and the new employer, if they have any special requirements. Understand how long you will be out of the market, and understand, to the best of your ability, if significant volatility is expected in that time frame.

Stay safe and healthy out there!

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ChpBstrd

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Re: Why did I choose to do my 401k rollover this week?
« Reply #11 on: March 20, 2020, 03:01:20 PM »
I lost $4,400 on a change of plan administrators back in January. I was out of the market from 1/1 to 1/21, during which time the market went up 3%.

The moment the new plan invested me in a 95% stock life cycle fund was the top that month. It then went down 3%. I stuck with the 95% stock fund until mid-Feb, when luckily I switched to a more conservative fund after having recovered most of my losses.

I didn't even do anything and still lost a good used car.