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1/22/2020 12:12:56 PM
Posted: 11/19/2012 10:38:21 AM EST
I have two 401k accounts of about the same size, one from a former employer and one active.

Roll the old one over, or keep them separate?


Link Posted: 11/19/2012 10:42:31 AM EST
I was always told to roll them together. Anything happens to you and your heirs can track down one. Start having multiples and something might get missed.
Link Posted: 11/19/2012 10:45:19 AM EST
They will all be in the single government basket soon enough.
Link Posted: 11/19/2012 10:46:28 AM EST
Roll the one from your old employer into an ira with fidelity or vanguard. That way you have almost unlimited investment options. You keep it in a 401k, you are stuck with whatever options they choose for you.
Link Posted: 11/19/2012 10:50:17 AM EST
I have a Roth IRA that I could roll it into.
Link Posted: 11/19/2012 10:51:40 AM EST
Never leave your 401K with a previous employer.

Roll your former 401K into an IRA, not into your current 401K.

Your current employer has what 8, 10, 15 different choices? Why limit yourself to those limited choices with (probably) higher fees.

There are several low cost "do it yourself" places. ie: Vanguard.
Link Posted: 11/19/2012 10:52:58 AM EST
Originally Posted By wingnutx:
I have a Roth IRA that I could roll it into.


That would give you a lot more control of it.

But, no bs. Sell it, pay the fine, buy gold.

TXL
Link Posted: 11/19/2012 10:53:52 AM EST
Originally Posted By wingnutx:
I have a Roth IRA that I could roll it into.


You'll probably have to pay the taxes if you do that. I don't know a lot about rollovers, but I think rolling a tax deferred account into a Roth account means you'll have to pay the taxes on it now.

You'd be better off opening a regular IRA to roll your 401K into since you've already deferred taxes on it.
Link Posted: 11/19/2012 10:55:34 AM EST
USAA or Vanguard....
Link Posted: 11/19/2012 10:56:17 AM EST

Originally Posted By wingnutx:
I have a Roth IRA that I could roll it into.

I was going to recommend you CONSIDER rolling one into a Roth. Of course, you'd have to pay taxes on it now, but future growth is not taxed. This is especially good if you're young.

As for your heirs losing track of one of your accounts.... that should NEVER happen if you're reasonably diligent.

I like the idea of not having all your eggs in one basket. Plus, you may get better returns in a place like Vanguard that is noted for low fees.
Link Posted: 11/19/2012 10:57:38 AM EST
Originally Posted By heavily_armed:
Roll the one from your old employer into an ira with fidelity or vanguard. That way you have almost unlimited investment options. You keep it in a 401k, you are stuck with whatever options they choose for you.


NO!

To OP, only consider rolling your old 401(k) into your new one once you've ascertained whether or not the expenses and investment options are up to your standards...Remember, a 401(k) is a product that your employer purchases, not all are created equal. Some aren't even worth bothering with while others have fantastic investment options & fee structures.

However; 9.9/10 times I tell existing & prospective clients that rolling their money into a BROKERAGE ACCOUNT R/O IRA is the best option whether they decide to work with me, someone else or manage it themselves (etrade, scottrade etc). The reason being is then you can invest in anything (stocks, bonds, mutual funds, REITS, DPPs, CD's, etf's, etc, or nothing at all). If you go with a direct mutual fund company all you can invest in are their mutual funds. Additionally, if an emergency were to arise and you had no choice but to take an early distribution from a qualified account having both a 401(k) and an IRA will provide you multiple options as to how best manage the associated taxes and/or expenses whereas only having one or the other severly limits your options.

If you don't have an advisor you trust or don't want one, before doing anything embark on a serious self-study about managing your own money (you can do it!), then make a decision.
Link Posted: 11/19/2012 10:59:27 AM EST
Do your beneficiary a favor and consolidate.

I'm contacting my Father's last 6 companies and faxing/emailing and phone calling them all for 401k infomration and expending it..

Takes months.
Link Posted: 11/19/2012 11:00:43 AM EST
furthermore, diversification has to do with the variety of invesments that you own, not how many accounts.

Example: you own growth fund from vanguard in one account and growth fund from fidelity in another account; diversified? No. At best maybe slightly. But you still own assets at the extreme end of risk spectrum regardless of whomever's name is on them.
Link Posted: 11/19/2012 11:00:50 AM EST
Originally Posted By klinc:
They will all be in the single government basket soon enough.


Damn, someone beat me to it.

I'd be asking a financial strategist about converting them all to Roth before the FSA does it for you at regular income tax+FICA tax+Medicare tax rates.

Link Posted: 11/19/2012 11:02:13 AM EST
Originally Posted By gettingthere:
Originally Posted By heavily_armed:
Roll the one from your old employer into an ira with fidelity or vanguard. That way you have almost unlimited investment options. You keep it in a 401k, you are stuck with whatever options they choose for you.


NO!

To OP, only consider rolling your old 401(k) into your new one once you've ascertained whether or not the expenses and investment options are up to your standards...Remember, a 401(k) is a product that your employer purchases, not all are created equal. Some aren't even worth bothering with while others have fantastic investment options & fee structures.

However; 9.9/10 times I tell existing & prospective clients that rolling their money into a BROKERAGE ACCOUNT R/O IRA is the best option whether they decide to work with me, someone else or manage it themselves (etrade, scottrade etc). The reason being is then you can invest in anything (stocks, bonds, mutual funds, REITS, DPPs, CD's, etf's, etc, or nothing at all). If you go with a direct mutual fund company all you can invest in are their mutual funds. Additionally, if an emergency were to arise and you had no choice but to take an early distribution from a qualified account having both a 401(k) and an IRA will provide you multiple options as to how best manage the associated taxes and/or expenses whereas only having one or the other severly limits your options.

If you don't have an advisor you trust or don't want one, before doing anything embark on a serious self-study about managing your own money (you can do it!), then make a decision.


You're saying basically what I said, but with a lot more words and drama.
Link Posted: 11/19/2012 11:02:31 AM EST
Originally Posted By wingnutx:
I have two 401k accounts of about the same size, one from a former employer and one active.

Roll the old one over, or keep them separate?




Merge.

"honey pot" accounting is never worth it...
Link Posted: 11/19/2012 11:05:42 AM EST
[Last Edit: 11/19/2012 11:06:41 AM EST by wingnutx]

Originally Posted By gettingthere:
Originally Posted By heavily_armed:
Roll the one from your old employer into an ira with fidelity or vanguard. That way you have almost unlimited investment options. You keep it in a 401k, you are stuck with whatever options they choose for you.


NO!

To OP, only consider rolling your old 401(k) into your new one once you've ascertained whether or not the expenses and investment options are up to your standards...Remember, a 401(k) is a product that your employer purchases, not all are created equal. Some aren't even worth bothering with while others have fantastic investment options & fee structures.

However; 9.9/10 times I tell existing & prospective clients that rolling their money into a BROKERAGE ACCOUNT R/O IRA is the best option whether they decide to work with me, someone else or manage it themselves (etrade, scottrade etc). The reason being is then you can invest in anything (stocks, bonds, mutual funds, REITS, DPPs, CD's, etf's, etc, or nothing at all). If you go with a direct mutual fund company all you can invest in are their mutual funds. Additionally, if an emergency were to arise and you had no choice but to take an early distribution from a qualified account having both a 401(k) and an IRA will provide you multiple options as to how best manage the associated taxes and/or expenses whereas only having one or the other severly limits your options.

If you don't have an advisor you trust or don't want one, before doing anything embark on a serious self-study about managing your own money (you can do it!), then make a decision.

There doesn't seem to be much of a cost difference between old (fidelity) and current (TRP) 401ks, but I'll take a closer look.

Roth IRA at USAA and has pretty low fees.


Link Posted: 11/19/2012 11:12:16 AM EST
Originally Posted By wingnutx:

Originally Posted By gettingthere:
Originally Posted By heavily_armed:
Roll the one from your old employer into an ira with fidelity or vanguard. That way you have almost unlimited investment options. You keep it in a 401k, you are stuck with whatever options they choose for you.


NO!

To OP, only consider rolling your old 401(k) into your new one once you've ascertained whether or not the expenses and investment options are up to your standards...Remember, a 401(k) is a product that your employer purchases, not all are created equal. Some aren't even worth bothering with while others have fantastic investment options & fee structures.

However; 9.9/10 times I tell existing & prospective clients that rolling their money into a BROKERAGE ACCOUNT R/O IRA is the best option whether they decide to work with me, someone else or manage it themselves (etrade, scottrade etc). The reason being is then you can invest in anything (stocks, bonds, mutual funds, REITS, DPPs, CD's, etf's, etc, or nothing at all). If you go with a direct mutual fund company all you can invest in are their mutual funds. Additionally, if an emergency were to arise and you had no choice but to take an early distribution from a qualified account having both a 401(k) and an IRA will provide you multiple options as to how best manage the associated taxes and/or expenses whereas only having one or the other severly limits your options.

If you don't have an advisor you trust or don't want one, before doing anything embark on a serious self-study about managing your own money (you can do it!), then make a decision.

There doesn't seem to be much of a cost difference between old (fidelity) and current (TRP) 401ks, but I'll take a closer look.

Roth IRA at USAA and has pretty low fees.




Remember too that you must do your due diligence as it relates to the efficacy of the investment options. If you go with an account direct at a fund company (fidelity) you then do not have the world of investment options at your disposal. Yes Fidelity has a lot of investment options but trust me, don't limit yourself.

And, if you roll it into a roth ira, the entire amount rolled is taxable as ordinary income, this may bump the rest of your earned income into another bracket thus reducing your annual net income not to mention possibly exposing you to the alternative minimum tax.
Link Posted: 11/19/2012 11:18:23 AM EST

Originally Posted By gettingthere:


And, if you roll it into a roth ira, the entire amount rolled is taxable as ordinary income, this may bump the rest of your earned income into another bracket thus reducing your annual net income not to mention possibly exposing you to the alternative minimum tax.

Now that is not something that had even crossed my mind, and probably would have bit me. Thanks.
Link Posted: 11/19/2012 11:22:27 AM EST
Tag.

My new employer has a 401k that I think stinks, so I am looking at rolling as much as I can to a Vanguard account.

For an annual for of $50(?) my new employer's 401k plan has a Charles Schwab investment account option that I will likely use to get better choices with the money I do contribute there, since annual maximum limits for (non-roth) IRAs are laughable.
Link Posted: 11/19/2012 11:35:22 AM EST
Originally Posted By gettingthere:
Originally Posted By wingnutx:

Originally Posted By gettingthere:
Originally Posted By heavily_armed:
Roll the one from your old employer into an ira with fidelity or vanguard. That way you have almost unlimited investment options. You keep it in a 401k, you are stuck with whatever options they choose for you.


NO!

To OP, only consider rolling your old 401(k) into your new one once you've ascertained whether or not the expenses and investment options are up to your standards...Remember, a 401(k) is a product that your employer purchases, not all are created equal. Some aren't even worth bothering with while others have fantastic investment options & fee structures.

However; 9.9/10 times I tell existing & prospective clients that rolling their money into a BROKERAGE ACCOUNT R/O IRA is the best option whether they decide to work with me, someone else or manage it themselves (etrade, scottrade etc). The reason being is then you can invest in anything (stocks, bonds, mutual funds, REITS, DPPs, CD's, etf's, etc, or nothing at all). If you go with a direct mutual fund company all you can invest in are their mutual funds. Additionally, if an emergency were to arise and you had no choice but to take an early distribution from a qualified account having both a 401(k) and an IRA will provide you multiple options as to how best manage the associated taxes and/or expenses whereas only having one or the other severly limits your options.

If you don't have an advisor you trust or don't want one, before doing anything embark on a serious self-study about managing your own money (you can do it!), then make a decision.

There doesn't seem to be much of a cost difference between old (fidelity) and current (TRP) 401ks, but I'll take a closer look.

Roth IRA at USAA and has pretty low fees.




Remember too that you must do your due diligence as it relates to the efficacy of the investment options. If you go with an account direct at a fund company (fidelity) you then do not have the world of investment options at your disposal. Yes Fidelity has a lot of investment options but trust me, don't limit yourself.

And, if you roll it into a roth ira, the entire amount rolled is taxable as ordinary income, this may bump the rest of your earned income into another bracket thus reducing your annual net income not to mention possibly exposing you to the alternative minimum tax.


And, it's not account fees you need to worry about, it's the invesment fees. For instance, compare the 12b-1 fees (annual expenses) of what you have and what you're considering buying. Some mutual funds charge well over 1% year for unmanaged index funds! That's laughably expensive.
Link Posted: 11/19/2012 2:11:36 PM EST
I created a rollover IRA the first time I changed jobs. I've switched jobs a couple more times since then, and just keep rolling the 401(k) funds into the rollover IRA.
Link Posted: 11/19/2012 3:16:14 PM EST
Originally Posted By wingnutx:

Originally Posted By gettingthere:
Originally Posted By heavily_armed:
Roll the one from your old employer into an ira with fidelity or vanguard. That way you have almost unlimited investment options. You keep it in a 401k, you are stuck with whatever options they choose for you.


NO!

To OP, only consider rolling your old 401(k) into your new one once you've ascertained whether or not the expenses and investment options are up to your standards...Remember, a 401(k) is a product that your employer purchases, not all are created equal. Some aren't even worth bothering with while others have fantastic investment options & fee structures.

However; 9.9/10 times I tell existing & prospective clients that rolling their money into a BROKERAGE ACCOUNT R/O IRA is the best option whether they decide to work with me, someone else or manage it themselves (etrade, scottrade etc). The reason being is then you can invest in anything (stocks, bonds, mutual funds, REITS, DPPs, CD's, etf's, etc, or nothing at all). If you go with a direct mutual fund company all you can invest in are their mutual funds. Additionally, if an emergency were to arise and you had no choice but to take an early distribution from a qualified account having both a 401(k) and an IRA will provide you multiple options as to how best manage the associated taxes and/or expenses whereas only having one or the other severly limits your options.

If you don't have an advisor you trust or don't want one, before doing anything embark on a serious self-study about managing your own money (you can do it!), then make a decision.

There doesn't seem to be much of a cost difference between old (fidelity) and current (TRP) 401ks, but I'll take a closer look.

Roth IRA at USAA and has pretty low fees.





In order to evaluate the fees on the 401ks you will need to assess what the recent contract asset charge have been. Ask for a fee and disclosure and comparative chart. If the old plan is with a large employer the fees are probably not a big problem. If it is a small employer they might be enormous. I understand the advantages roth conversion but do you really want to pay several thousand dollars in extra taxes this year? if not usaa will happily open a traditional ira for you.
Link Posted: 11/19/2012 3:22:35 PM EST
Originally Posted By gettingthere:
Originally Posted By gettingthere:
Originally Posted By wingnutx:

Originally Posted By gettingthere:
Originally Posted By heavily_armed:
Roll the one from your old employer into an ira with fidelity or vanguard. That way you have almost unlimited investment options. You keep it in a 401k, you are stuck with whatever options they choose for you.


NO!

To OP, only consider rolling your old 401(k) into your new one once you've ascertained whether or not the expenses and investment options are up to your standards...Remember, a 401(k) is a product that your employer purchases, not all are created equal. Some aren't even worth bothering with while others have fantastic investment options & fee structures.

However; 9.9/10 times I tell existing & prospective clients that rolling their money into a BROKERAGE ACCOUNT R/O IRA is the best option whether they decide to work with me, someone else or manage it themselves (etrade, scottrade etc). The reason being is then you can invest in anything (stocks, bonds, mutual funds, REITS, DPPs, CD's, etf's, etc, or nothing at all). If you go with a direct mutual fund company all you can invest in are their mutual funds. Additionally, if an emergency were to arise and you had no choice but to take an early distribution from a qualified account having both a 401(k) and an IRA will provide you multiple options as to how best manage the associated taxes and/or expenses whereas only having one or the other severly limits your options.

If you don't have an advisor you trust or don't want one, before doing anything embark on a serious self-study about managing your own money (you can do it!), then make a decision.

There doesn't seem to be much of a cost difference between old (fidelity) and current (TRP) 401ks, but I'll take a closer look.

Roth IRA at USAA and has pretty low fees.




Remember too that you must do your due diligence as it relates to the efficacy of the investment options. If you go with an account direct at a fund company (fidelity) you then do not have the world of investment options at your disposal. Yes Fidelity has a lot of investment options but trust me, don't limit yourself.

And, if you roll it into a roth ira, the entire amount rolled is taxable as ordinary income, this may bump the rest of your earned income into another bracket thus reducing your annual net income not to mention possibly exposing you to the alternative minimum tax.


And, it's not account fees you need to worry about, it's the invesment fees. For instance, compare the 12b-1 fees (annual expenses) of what you have and what you're considering buying. Some mutual funds charge well over 1% year for unmanaged index funds! That's laughably expensive.


CACs are a much bigger concern. 12b-1 fees are the sales charge component of mutual fund expense. Many 401ks have investment options completely lacking 12b-1's. Normally the expensive index funds you mentioned are sold by brokers and are expensive because the broker needs paid.
Link Posted: 11/19/2012 3:27:05 PM EST
Originally Posted By wingnutx:
I have a Roth IRA that I could roll it into.


You'll have to pay taxes to go to a Roth.

Use the same company and get a 'regular' IRA. That's the one you keep when you switch jobs.
Link Posted: 11/20/2012 3:50:00 AM EST
Originally Posted By ASUsax:
Originally Posted By wingnutx:
I have a Roth IRA that I could roll it into.


You'll have to pay taxes to go to a Roth.

Use the same company and get a 'regular' IRA. That's the one you keep when you switch jobs.


So, if you roll over your 401k into a regular IRA, is there any legal way to contribute to it on an ongoing basis at a rate similar to what one can put into a 401k? My knowledge is minimal, but I thought there were very low caps on IRA contributions.
Link Posted: 11/20/2012 7:18:32 AM EST
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