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401k rollover

brianhos said:
Switching jobs after a rather long time at one place, and I need to move my 401k. For those of you that have done this, what did you do? Move it into the new employers account or move it to something like etrade, ameritrade, vanguard?
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There's no reason not to roll it over to a brokerage IRA, unless unlimited options is a problem. I use Schwab, which has been good.
 
Trice said:
Consolidate as much as possible. You'll be doing your future self and your heirs a favor.

Think of it this way...you're already probably managing at least 3 retirement accounts (your 401k, spouse 401k, your IRA, possible spouse IRA), why add another?

I've been helping an older relative manage their finances the last couple of years and the amount of stuff people forget is just astounding. The fewer accounts you have, the less there is to manage and potentially forget about.

And if you pass before your time, it's one less account your heirs have to chase down after you're gone.
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ricochet said:
If it was me my choices in order would be:
1. Roll it into your Vanguard IRA
2. Roll it into a Fidelity IRA
3. Leave it in your old companies 401k
4. Light it on fire
5. Roll it into your new Principal 401k

Seriously though, unless things have changed Principal is just stupid expensive and I would keep as much money away from it as possible. Our company used it for like a year or so and I think there was a 1% fee on top of really high fees on their funds. We are a tiny company though so maybe bigger companies can get a better deal.
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Good answers, thanks.

I'm tempted to do the Fidelity IRA just because it's the "instantaneous" option with fewer hoops upfront. But it seems even if I do that I'll still have flexibility to consolidate when ready?

Edit: Got some more guidance on Vanguard website that clears some things up.
 
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I would consolidate into a single brokers platform. I’d never roll my 401k into another 401k just for the fact that IRAs offer so many more options to choose from. For me, I use fidelity as that’s where I have my brokerage accounts in addition to my IRAs.

Transferring a fidelity 401k into a fidelity IRA as it’s on the same platform. It’s super easy. In the past, when I’ve had to do transfers from different institutions, I’ve had to go through more steps like getting a check sent to me, making sure the check has specific language on it, long forms to fill out, etc.
 
Cyched said:
Good answers, thanks.

I'm tempted to do the Fidelity IRA just because it's the "instantaneous" option with fewer hoops upfront. But it seems even if I do that I'll still have flexibility to consolidate when ready?

I'm not ruling out consolidating into Fidelity, as Vanguard isn't totally clear if they'll combine accounts or create separate IRAs for the rollover (I have both pretax and Roth dollars in the 401k).
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I have one login with Vanguard, but my pretax IRA (consisting of old 401ks) and my Roth IRAs are considered separate accounts, for obvious reasons. I don't believe I've ever rolled over a Roth 401k but I would assume the pretax 401k rolls to the pretax IRA, and the Roth 401k rolls to the Roth IRA. Should be simple and straightforward.

If the old employer's 401k plan is with Fidelity and you roll to Fidelity IRAs, you could then move to another provider at your convenience but you may be limited by the once-per-year rule, so read up on that.
 
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I really like Fidelity's interface.
When I've rolled stuff into them they said sometimes the ex will charge a fee and Fidelity has covered that.
 
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Trice said:
I have one login with Vanguard, but my pretax IRA (consisting of old 401ks) and my Roth IRAs are considered separate accounts, for obvious reasons. I don't believe I've ever rolled over a Roth 401k but I would assume the pretax 401k rolls to the pretax IRA, and the Roth 401k rolls to the Roth IRA. Should be simple and straightforward.

If the old employer's 401k plan is with Fidelity and you roll to Fidelity IRAs, you could then move to another provider at your convenience but you may be limited by the once-per-year rule, so read up on that.
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To clarify, I understand that pre-tax & Roth dollars will be in separate accounts. I have both with Vanguard, so I was just wanting to make sure I could consolidate into the existing accounts. Which it looks like you can walking through the steps on their website.

Didn't know about the once-per-year rule, so that's good info.
 
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SCNCY said:
Transferring a fidelity 401k into a fidelity IRA as it’s on the same platform. It’s super easy. In the past, when I’ve had to do transfers from different institutions, I’ve had to go through more steps like getting a check sent to me, making sure the check has specific language on it, long forms to fill out, etc.
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Yeah I've had to do this in the past. Handling and mailing physical checks for such a large dollar amount makes me more nervous than it should.

I think you can generally avoid it if you're transferring to and from big brokers. I didn't have to when I rolled an old ESOP into my current Vanguard IRA.
 
ricochet said:
If it was me my choices in order would be:
1. Roll it into your Vanguard IRA
2. Roll it into a Fidelity IRA
3. Leave it in your old companies 401k
4. Light it on fire
5. Roll it into your new Principal 401k

Seriously though, unless things have changed Principal is just stupid expensive and I would keep as much money away from it as possible. Our company used it for like a year or so and I think there was a 1% fee on top of really high fees on their funds. We are a tiny company though so maybe bigger companies can get a better deal.
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Finally got signed up for the new 401k with Principal. This investment lineup...woof.

Just affirmation that rolling into the individual IRA was a good call.
 
Cyched said:
Finally got signed up for the new 401k with Principal. This investment lineup...woof.

Just affirmation that rolling into the individual IRA was a good call.
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Genuinely curious, how bad? Just really few options? I rolled my Cerner 401k into a Fidelity IRA when Oracle bought us out, when I saw Oracles options I wouldn't have been mad if I took the other option we had of rolling it into the Oracle 401k plan. Cerner had a decent selection, Oracle has at least twice as many including 1 really aggressive fund that is like 98% Oracle stock. Before I get bashed for using that fund for a decent chunk, I rebalance every year, at least, and am in my early 30s so being aggressive for the time being.
 
TitanClone said:
Genuinely curious, how bad? Just really few options? I rolled my Cerner 401k into a Fidelity IRA when Oracle bought us out, when I saw Oracles options I wouldn't have been mad if I took the other option we had of rolling it into the Oracle 401k plan. Cerner had a decent selection, Oracle has at least twice as many including 1 really aggressive fund that is like 98% Oracle stock. Before I get bashed for using that fund for a decent chunk, I rebalance every year, at least, and am in my early 30s so being aggressive for the time being.
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Not many options overall, and fewer for low cost funds. The “best” fixed income fund (outside of the typical ST income/stable value) is a HY bond fund. Have the target/lifepath funds, but like 0.6% expense ratio.

The saving grace is they do have the Vanguard S&P index fund, so that’s a great option for the US allocation. Then just picking the best worst option for international and bonds.
 
Cyched said:
Not many options overall, and fewer for low cost funds. The “best” fixed income fund (outside of the typical ST income/stable value) is a HY bond fund. Have the target/lifepath funds, but like 0.6% expense ratio.

The saving grace is they do have the Vanguard S&P index fund, so that’s a great option for the US allocation. Then just picking the best worst option for international and bonds.
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Damn, 0.6% is crazy i have a little in 2 separate target funds and they're both 0.0375%. Only 1 of the 8 funds I have money in is over 0.1%.
 
TitanClone said:
Damn, 0.6% is crazy i have a little in 2 separate target funds and they're both 0.0375%. Only 1 of the 8 funds I have money in is over 0.1%.
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To be fair, there are going to be higher fees with a 401k vs IRA if that is what is being compared. The larger the company you’re at the lower the fees but still higher than an IRA. It might stink but the company match (if there is one) should far outweigh the fees. If there is no match and you can tax shelter in other accounts sufficiently then avoid the 401k.

Those investment management expenses are often partially covering the cost of plan expenses. There are many extra costs not associated with an IRA like administration fees, plan governmental filings and audits, advisor/TPA fees, plan consulting costs, etc that an IRA just doesn’t have.
 
cyman05 said:
To be fair, there are going to be higher fees with a 401k vs IRA if that is what is being compared. The larger the company you’re at the lower the fees but still higher than an IRA. It might stink but the company match (if there is one) should far outweigh the fees. If there is no match and you can tax shelter in other accounts sufficiently then avoid the 401k.

Those investment management expenses are often partially covering the cost of plan expenses. There are many extra costs not associated with an IRA like administration fees, plan governmental filings and audits, advisor/TPA fees, plan consulting costs, etc that an IRA just doesn’t have.
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Those numbers were from my 401k.
 
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