tony soprano
Confused about dryer sheets
- Joined
- Dec 13, 2015
- Messages
- 5
Hello all,
I'm 55 and less than 12 months out from pulling the plug. I'll be 56 when I make my exit. My tax-deferred investment funds are split between my current employer's 401K plan, and an ETrade IRA that was created by rolling over my previous employer's 401K plan when I left. The current allocation by dollar amount is ~40% in my 401K and ~60% in my IRA.
My employer's 401K plan will allow me to roll my IRA funds into my 401K. My first thought was it would be a good idea to do so, because the "rule of 55" would allow access to the funds without penalty. However, the downside is my employer's 401K is primarily limited to target-date funds. There is a "self-directed" option, which I've elected to do. The self-directed plan transfers the 401K funds to a Charles Schwab brokerage account where I can buy individual stocks, bonds, ETFs, etc. When I leave my current employer, I'll be charged a service fee of $10 a month if I leave the funds in the self-directed Schwab account.
I have enough funds in post-tax investment accounts and savings that it's highly unlikely the rule of 55 would ever have to be exercised. I've searched and read every thing I can on the pros and cons of 401Ks vs IRAs, and vice-versa. Nothing has really jumped out to me as showing a distinct advantage for one or the other. I wanted to check with the collective wisdom of this forum to make sure there's not something I've missed. Is there any compelling reason to roll my IRA into my current 401K? Alternatively, any reason I should roll over my 401K into my IRA when I leave my current employer?
Thanks!
I'm 55 and less than 12 months out from pulling the plug. I'll be 56 when I make my exit. My tax-deferred investment funds are split between my current employer's 401K plan, and an ETrade IRA that was created by rolling over my previous employer's 401K plan when I left. The current allocation by dollar amount is ~40% in my 401K and ~60% in my IRA.
My employer's 401K plan will allow me to roll my IRA funds into my 401K. My first thought was it would be a good idea to do so, because the "rule of 55" would allow access to the funds without penalty. However, the downside is my employer's 401K is primarily limited to target-date funds. There is a "self-directed" option, which I've elected to do. The self-directed plan transfers the 401K funds to a Charles Schwab brokerage account where I can buy individual stocks, bonds, ETFs, etc. When I leave my current employer, I'll be charged a service fee of $10 a month if I leave the funds in the self-directed Schwab account.
I have enough funds in post-tax investment accounts and savings that it's highly unlikely the rule of 55 would ever have to be exercised. I've searched and read every thing I can on the pros and cons of 401Ks vs IRAs, and vice-versa. Nothing has really jumped out to me as showing a distinct advantage for one or the other. I wanted to check with the collective wisdom of this forum to make sure there's not something I've missed. Is there any compelling reason to roll my IRA into my current 401K? Alternatively, any reason I should roll over my 401K into my IRA when I leave my current employer?
Thanks!