I’ve been reading quite a bit in this sub forum lately in an attempt to avoid having to post my own thread, but I’m hoping you guys can steer me in the right direction.  I have a 401k from my most recent previous employer (managed by ADP) that I need to do something with and I’ve been considering opening my own account with a company such as Vanguard (I see them constantly mentioned in this forum), rather than simply rolling it over into my new employer’s 401k which is managed by Mass Mutual.  From my reading here, it seems that this would be a better option as it affords more control and options on my investing if I am understanding this all correctly.

My current employer keeps a financial advisor on retainer for the company’s employees use and I spoke with him recently.  Of course he proposed taking my ADP 401k and opening an account with him at Edward Jones as an option as opposed to just rolling into the new Mass Mutual 401k, but I am not sure I like that option just based upon my layman’s knowledge as I’m sure there’s some additional costs and risks with letting him play around with my money.  Of course if I’m wrong, I’d like to know that as well.

Reading around here it seems as though opening my own account with someone like Vanguard is the generally accepted recommendation, but I am unsure how that all works.  Also, even though I know there are never any guarantees with any type of investments is there any more risk/reward with going with something like Vanguard over just rolling into the new 401k at work?  With the previous ADP 401k I am invested in a target date fund although earlier this year I did move 15% of my balance to a more aggressive fund.  If I go to Vanguard, what should I be investing in there?  Would it simply be another target date fund or would the recommendation be to go with one of the S&P or total stock market index funds I see you all talking about?

I also have an IRA account with John Hancock that was converted from a traditional 401k I had with the employer before this most recent one.  That one was created about 4 years ago when I left that company and converted it to an IRA, and I do not contribute to it.  My thought was to maybe leave that one where it is to have a little diversification- is that a good thought?  To complete the picture, at my new employer I am contributing 12% to the Mass Mutual 401k and the company is giving me a 4% match, for a total of 16%.

I appreciate any guidance and explanation that might be offfered here.  I do have a basic understanding of investing but am nowhere near the knowledge level that I read from some of you here.  I just would like to know if a Vanguard or similar account provides any kind of advantage over simply pooling everything into my target date fund 401k, and if so how I go about setting it up.  Also, anything I should be aware of that might affect me from a tax or accessibility aspect would be good to know.  Although I don’t foresee any reason I would need to access this money ahead of retirement, there is always something that could come up.  After going through a rough divorce a few years ago I am a single guy renting an apartment, but I suppose that one day I might want to look at a townhouse or something and may need to access some of these funds for a down payment.  This is something I am very on the fence about, as I am not so sure that as a 44 year old guy with no kids to leave anything to there is much of a reason to sign up for a mortgage at this point in my life.  In that regards, I have not made any final decisions yet but probably should consider how handling these funds would affect their accessibility if needed down the line.

Thanks for taking the time to read this and I look forward to reading some thoughtful and helpful posts.

ADP would suck cash out  with their fee structures as would EJ. Roll it over, Vanguard will guide through it.

This.  OP could also roll it to his John Hancock IRA but personally I prefer Vanguard so I would consolidate everything there.

Roll it over to vanguard, fidelity, etc. Get away from an "advisor" and unneccesary fees. Roll your current IRA to the same. Being at different brokerage firms doesn't diversify your account. The funds you decided to hold do that. Total stock market/total bond market, or a target date are about as diverse as you need to get.

Open the account, get your money moved over - handled entirely by the new firm- and put the control in your hands.  Best to get it set up and just forget about it. Set up automatic transactions if you want to keep contributing to it.

I just went through this with my wife's account.

1.  Open a traditional or "Rollover" IRA online at Vanguard (or Fidelity).  You can do this online, without any help, in about 15 minutes.

2.  Initiate a Rollover for your 401k.  Put in the approximate amount, and then Vanguard will give you instructions for your other provider.  Then - contact the 401k provider, and request their rollover procedures.  Every plan can be a little different here - generally they have an online or printed form that needs to be filled out - with the destination account number/company, with you authorizing the rollover.  Then they will handle the transfer either by wire, or a check.  The check might be sent directly to your new provider (Vanguard) or it might be sent directly to you but made out to vandguard with your account number referenced.  Either way - this process usually takes about two weeks.... but it relatively painless.

2a.  If all the money you have in the 401k is pre-tax, there is nothing left to do.  If any of the money is after-tax, or Roth 401k, then roll that to an existing Roth IRA, or open a new Roth IRA at Vanguard (or Fidelity) and roll the after-tax portion to the Roth IRA.

3.  Initiate a Rollover for any non-Roth IRA's you have to your new traditional (rollover) IRA at Vanguard (or Fidelity).  This is a much more streamlined process and can usually be done online - through Vanguard.  Just follow the wizard, and they will contact the IRA holder, and manage the transfer electronically in most cases.  This process takes about a week.

We used Vanguard for her, and it was pretty easy looking back at it.  At first it was a little challenging.  You can always call Vanguard if you need a little hand-holding, but it was really straightforward.  The hardest part was dealing with Schwab, where we were rolling her IRA and 401k from.

Great job reading, learning and thinking for yourself. It'll pay off in the long run. Most folks don't take ANY action on these things.

The rollover is stupidly simple:
Step 1) Roll that old 401k to Vanguard. You'll be essentially setting up a new traditional IRA to setup the money. Remember, Vanguard wants to make this as painless as possible for you.
You'll run it through Vanguard then provide your old account numbers etc to them then THEY will have the money rolled to them. Sometimes it's electronically. Sometimes it's a check but make sure it goes to them and not YOU. DO NOT CASH IT. (if you do you trigger taxes-penalites). My last rollover was all electronic.

The money will just be in their settlement funds in your name in your account. sit tight.

Step 2) Consolidate. Same thing, roll that IRA from John Hancock over.

Step 3) Meanwhile, do some more reading and educating yourself. Especially the time horizons. Depending on the size of the total account, you can get into different funds such as VFIAX, VWUAX or VTSMX.

Vanguard roll over, pretty damn easy.

Edit: Good grief my post was nearly identical to FALARAK's.

Thank you guys for taking the time to make these very informative posts.  I’ll go ahead and work on transferring the ADP 401k and John Hancock accounts to Vanguard, and then I’ll want some information from you guys about the various funds to consider investing in.  I’ll probably be most interested in a target date fund as well as either a S&P or total market index fund but I know there’s a few of those to choose from.  I’d also like to hear about any other funds generally accepted around here as being noteworthy.

As stated before, I’m 44 so I’m assuming I’ll want something targeted around 20 years out, correct?  Just wondering if there’s a strategy where I want to go a little longer or shorter on that.  This most recent job is truly my dream career with a very solid organization that has a great history of employee longevity and takes very good care of its employees.  Although I want to retire early enough to enjoy the good life hunting and fishing, I assume I will give this company at least 20 years.

Thanks again for all the detailed and insightful posts, and I solicit and appreciate further input.  This is a subject that is important to me and I do not have all the answers.

Depends on when you plan to retire and your other assets, investments, etc.  Also I read an article a while ago that stated the target retirement style mutual funds were often a bit conservative in their selections for their given target dates, so you may want to pick one with a target date 5-10 years after you retire, to help avoid outliving your retirement savings.

Pick something based on the asset allocation (stocks to bonds ratio) not based on the year. If you are truly going for 20 more years I’d go 50-60% equities (stocks). Vanguards life strategie funds would be a good choice for you, or you can do this via individual funds.

I say this a lot here, but I would head over to the bogleheads forum and at least read the wiki, and would encourage you to join and post your #’s. I’ve gotten into investing almost as hot as heavy as my gun hobbies, and it can actually be fun with the right approach.

Just stay away from fee advisors. They will eat your returns alive.

Definitely do some reading in the Bogleheads forum.  They basically follow a really simple approach of using 3 or so (total) market index funds, which requires minimal education and upkeep, and will make your holdings very diverse.

With the target date funds the date you choose is essentially determining the bond (lower return and lower risk) vs equity (higher return & higher risk) allocation percentage, because it is widely accepted that you probably want to reduce your risk as your wealth increases and you get closer to your retirement.  So, switching target fund dates will result in you tweaking the bond to equity/stock ratio to be more or less conservative.

I didn't start saving seriously until late, and have probably 15-20 years before retirement also, so I plan to stay invested a little more aggressively for the next 5-10 years to hopefully catch up a little.  I'm also single with no kids, so nobody is dependent on me over the long-term.  If the market takes off and I find myself caught up to where I want to be at that particular time, I would likely back off the aggressiveness of my investments.

Subscribed. I'm leaving EJ before 2019

Start a new thread before you do. Promise you’ll get some great lessons learned from those of us who’ve been there.

I like Vanguard whole market funds, but the three fund portfolio, a target date from Vanguard or a more complicated allocation plan utilizing index funds can all be good options.

I’m moving right along with the Vanguard account opening process.  Received my roll over check from ADP today and working with Vanguard on moving my John Hancock IRA electronically.  This weekend I have to print out some documents for Vanguard, sign them and mail them in.  Not a totally electronic process but so far it has been rather smooth.  Since I’m moving two accounts to them at the same time, it’s been a little cumbersome.

Once the funds are there I will be hitting you guys up for some advice/tips on how to navigate the Vanguard system and choose my funds.

Alright, guys.  For those of you who have chimed in and helped me out, I just completed my first purchase at Vanguard as the first of two balance transfers processed this morning and I had funds to invest.  I went with VFORX, a target date fund.  Now I am awaiting the transfer of my other account (my John Hancock IRA), and would like to know any other funds you all recommend I take a look at.  If not, I’ll probably just put that money in VFORX as well, or maybe another target date fund a little further down the road?

Target date funds mix in bond funds so you've got that bond exposure already. I wouldn't buy another target date fund but now "buy the market".

Do some reading as you're looking for Total Market funds (Jaqu has posted several and is a big fan).

Do some additional reading and buy foundational S&P 500 indexed funds. These typically are one notch better in performance. These are my favorite and my foundation. Personally, I don't by total market funds, why not trim the fat and the under performing and get the top 500 or 300 or 150 companies?

Read this, it'll be greek the first time but then read it and keep reading.

The theoretical advantage of whole markets vs a 500 index is that in general it's considered harder for a large company to grow than a small company.  So the small companies over a long period of time are expected to have higher performance.  They also have higher volatility.

With a whole market fund you are already pretty heavily invested in the S&P 500.  IIRC it's about 73% of a whole market funds holdings.  Another 18% would run to midcaps and 9% to small caps.  IIRC Vanguard is pushing their employees to whole market funds in their retirment accounts instead of the S&P 500 funds.

In the end, I don't think it makes huge difference.  Taxes and fees are likely to be bigger issues than utilizing an S&P 500 fund over a whole market fund.

Thank you for your input.  Would you mind suggesting a few whole market funds to take a look at?  My other transfer should be coming in at any time now and I’d like to know where that money is going by the time it is available.  Thanks!

I like VTI and VTSAX if you utilize Vanguard.  If you are using Fidelity, I would probably use ITOT.

I went with Vanguard.