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401(k) Rollover to IRA in down market?
Old 06-28-2008, 05:44 PM   #1
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401(k) Rollover to IRA in down market?

DW & I have about $365k sitting in 401(k) accounts from past employers. The returns from those accounts have been decent, which is why we've left them there. I'd like to move the funds to an IRA which will give us better investment options and more control, but wonder about the timing.

It always feels better to "sell high", but logic tells me that while our accounts have gotten hammered along with everybody else's, there's really no financial harm in rolling them over now because we'll be buying into new funds at similarly depressed prices. Any flaws in that thinking?

Any input or advise will be appreciated.
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Old 06-28-2008, 06:44 PM   #2
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No problem, market up or down, though it would be nice if it would stay constant during the rollover.

You may have a day or two that you are out of the market during the rollover, unless you can transfer in-kind (transfer shares instead of dollars). As long as the whole market doesn't jump up 5% during that time you'll be in good shape.

If you are moving several accounts, you could move them at different times and reduce the chances of hitting one big market moving day.
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Old 06-28-2008, 07:29 PM   #3
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Quote:
Any flaws in that thinking?
No. When the market is high, you will buy back high. When the market is low, you will buy back low.
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Old 06-28-2008, 08:03 PM   #4
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Just as a minor point.....if the switch is going to be made to similar funds, probably no issue but you mentioned changing to an IRA to get more investment options. Since the different sectors could have performed differently, switching to a very different type choice could have a different consequence so you might want to check the relative performances of your old funds and the new ones you are going into esp. if they are of a very different type.
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Old 06-28-2008, 11:53 PM   #5
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Thanks folks, appreciate the input. The funds will (initially at least) be similar, so I think we're good.
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