Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 06-04-2014, 09:31 AM   #21
Thinks s/he gets paid by the post
target2019's Avatar
 
Join Date: Dec 2008
Posts: 3,708
Quote:
Originally Posted by mathjak107 View Post
the op made up quite a comprehensive list of pro's and con's but missed the number one reason for not leaving money with an ex employer.


having had my 401k trapped in the maze of procedures and paper work when my company fell on hard times and closed the 401k i would say never leave money in a 401k with an ex employer if you do not have to.


we were lucky and it took only 8 months. for 8 months all access is cut off , the money is moved into cash by the state while the state assigns a custodian to break it up.
this wasn't a bankruptsey, the company just was closing down and stopped paying the custodian while closing the plan.

the custodian stops acting as the custodian and the state takes over until they assign a state appointed custodian.

there are ex employees that have to be tracked down so spousal concent forms can be signed as well.

folks who had a plan closed on them have waited years sometimes to get their money out.

no money can be sent out until all forms are back signed. it is a very long process .


this is something you do not even think about when you leave money with an ex employer until it happens to you.
That is something to consider. I'm only familiar with a few plans, and they are all sponsored by very large global companies. My view is very skewed in that regard.

The other part of the equation is the services company you need to deal with. Again, I only have limited knowledge of Schwab, ING, Fidelity, who provided services in the examples I mentioned.

In my case, I am not afraid of megacorp or ING failing in the next 5-10 years. I'm sticking with 401(k) as is, and will consider a rollover next year.

I think your point should be included, and thanks for mentioning it.
__________________

__________________
target2019 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-04-2014, 09:38 AM   #22
Full time employment: Posting here.
 
Join Date: Jun 2013
Posts: 621
Another benefit of leaving the money in the 401k: If OP has post-tax money in an IRA, and wishes to convert some IRA money to a Roth, the pre-tax money in the 401k is not included in the pro rata rules for determining how much of a Roth conversion is taxable.
__________________

__________________
Which Roger is online now   Reply With Quote
Old 06-04-2014, 10:09 AM   #23
Recycles dryer sheets
 
Join Date: Apr 2006
Posts: 135
Quote:
Originally Posted by travelover View Post
Other factors are that... it may be more secure in a lawsuit.
Are 401ks treated differently than IRAs with regards to lawsuits?
__________________
Best!
-AJ
ajs56 is offline   Reply With Quote
Old 06-04-2014, 12:55 PM   #24
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 1,318
Quote:
Originally Posted by ajs56 View Post
Are 401ks treated differently than IRAs with regards to lawsuits?
401Ks are federally protected under the ERISA law. IRA protection differ by state.
__________________
Corporateburnout is offline   Reply With Quote
Old 06-04-2014, 12:59 PM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,889
Quote:
Originally Posted by ajs56 View Post
Are 401ks treated differently than IRAs with regards to lawsuits?
I believe that it varies from state to state.

IRAs Could Be Fair Game in Lawsuits¬*-¬*Los Angeles Times
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 06-04-2014, 02:04 PM   #26
Recycles dryer sheets
 
Join Date: Apr 2006
Posts: 135
Thanks for the replies, I will check on IRA law in Michigan!
__________________
Best!
-AJ
ajs56 is offline   Reply With Quote
Old 06-04-2014, 02:20 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,433
Quote:
Originally Posted by ajs56 View Post
Are 401ks treated differently than IRAs with regards to lawsuits?
Yes. IRAs vary by state. See IRA Asset Protection | Self Directed IRA | IRA Creditor Protection | IRA Bankruptcy Protection | www.irafinancialgroup.com or Protection From Creditors for Retirement Plan Assets
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now   Reply With Quote
Old 06-05-2014, 03:25 PM   #28
Full time employment: Posting here.
SumDay's Avatar
 
Join Date: Aug 2012
Posts: 799
Quote:
Originally Posted by pb4uski View Post
While I understand your reasoning, don't be short sighted - there can be some situations where it is better to leave the 401k with the employer - for example, if the employer 401k happens to offer a good stable value fund or access to other good funds not available to retail investors.

Again, as mentioned, a 401(k) is safe from lawsuits. Speaking from experience, it's a small price to pay to have that money "protected". There are some crazy people out there.
__________________
SumDay is offline   Reply With Quote
Old 06-05-2014, 05:50 PM   #29
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,539
Quote:
Originally Posted by mathjak107 View Post
having had my 401k trapped in the maze of procedures and paper work when my company fell on hard times and closed the 401k i would say never leave money in a 401k with an ex employer if you do not have to.
I saw that happen to a bunch of guys that I worked with. The former company went BK and it took years and thousands in attorney fees to get access to their 401ks. That's why when I left my 401k was rolled to an IRA within a few days.

But it depends on the company. I'd feel comfortable leaving my money in a 401k at stable company, say Coca-Cola or General Electric.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 06-05-2014, 05:58 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,413
or any of the other dow stocks that are no longer around.
__________________
mathjak107 is online now   Reply With Quote
Old 08-21-2014, 03:54 PM   #31
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,423
I was thinking of keeping my 401k account rather than rolling over.

But they would charge $5 a quarter. And who knows if they would raise those fees later.

It's with Schwab.

Anyone else facing fees for maintaining 401k accounts?
__________________
explanade is online now   Reply With Quote
Old 08-21-2014, 04:18 PM   #32
Thinks s/he gets paid by the post
Rustward's Avatar
 
Join Date: Apr 2006
Posts: 1,572
Quote:
Originally Posted by explanade View Post
I was thinking of keeping my 401k account rather than rolling over.

But they would charge $5 a quarter. And who knows if they would raise those fees later.

It's with Schwab.

Anyone else facing fees for maintaining 401k accounts?
Just curious: Is that $5/quarter factoring into your decision?
__________________
Rustward is offline   Reply With Quote
Old 08-21-2014, 04:39 PM   #33
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by SumDay View Post
Again, as mentioned, a 401(k) is safe from lawsuits. Speaking from experience, it's a small price to pay to have that money "protected". There are some crazy people out there.
Yes, a 401K is fully protected by federal law because (unlike an IRA) it is considered a pension plan, and federal pension laws protect 401K assets from lawsuits just as they protect defined benefit plans.

IRAs have various levels of protection from state to state. Texas, Florida and Oklahoma have the highest level of asset protection for IRAs, essentially unlimited just as a 401K plan is.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 08-21-2014, 05:26 PM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,433
I wouldn't sweat the $5/quarter. More important things to consider:

Investment choices, performance and expense ratios
Does the 401k have a good stable value fund that is not available in an IRA?
Potential for penalty free withdrawals if you left in or after the year you turned 55 if the plan allows it
Simplification of having everything in one spot
Treatment of IRA in a lawsuit in your state

In my case the better investment choices and lower expense ratios and simplification won out and i rolled my 401k over into my IRA.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now   Reply With Quote
Old 08-21-2014, 05:58 PM   #35
Thinks s/he gets paid by the post
Rustward's Avatar
 
Join Date: Apr 2006
Posts: 1,572
Quote:
Originally Posted by pb4uski View Post
I wouldn't sweat the $5/quarter. More important things to consider:

Investment choices, performance and expense ratios
Does the 401k have a good stable value fund that is not available in an IRA?
Potential for penalty free withdrawals if you left in or after the year you turned 55 if the plan allows it
Simplification of having everything in one spot
Treatment of IRA in a lawsuit in your state

In my case the better investment choices and lower expense ratios and simplification won out and i rolled my 401k over into my IRA.
Just to be clear this is where I was headed with the question.
__________________
Rustward is offline   Reply With Quote
Old 08-21-2014, 07:30 PM   #36
Recycles dryer sheets
Cat-tirement's Avatar
 
Join Date: Mar 2013
Posts: 188
My 401k will charge $4-5 per month (based on some complicated formula) beginning a year after separation. I plan on keeping my 401k for a good long time. It has a number of institutional Vanguard funds that I couldn't get otherwise, and their lower expense rates more than make up for the administration fee. Plus there's the extra legal protection mentioned by others.
__________________
How can you tell when a cat is retired?
Cat-tirement is offline   Reply With Quote
Old 08-21-2014, 09:47 PM   #37
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,423
Yeah for right now, it's in VBTIX.

$5 shouldn't be a factor but I wonder about fee-creep, Schwab increasing it over time.

I forgot about the liability protection but instead was wary about having it not fully in my control. Yet having it in Schwab, which is the custodian for my employer, should be no less under my control than my Vanguard Flagship account.
__________________

__________________
explanade is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Another decision to be made... trapperjohn FIRE and Money 3 10-10-2013 11:09 PM
Decision Made brewer12345 Young Dreamers 63 03-10-2013 11:17 AM
What is the best and/or worst financial decision made by.... Trex FIRE Related Public Policy 17 10-16-2011 11:44 AM
since i made the decision to ER ppl are noticing im more relaxed retiringat50 Life after FIRE 34 03-22-2008 07:38 PM
Anyone made this decision? SpaceTraveler FIRE and Money 21 06-04-2005 08:31 PM

 

 
All times are GMT -6. The time now is 10:19 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.