401k rollover?

[glinka]

Have been thinking about 401k rollover to Vanguard since retirement a few years ago. I'm GM retiree with Fidelity as 401k plan. Is it worth it? Supposed to be lower fees. I like the Contrafund. Is it best to join the different funds or go with all one, Vanguard or Fidelity?

 

[dmdunca44]

We chose to go with Vanguard for both our 401Ks. I want the simplicity of as few accounts as possible.

Vanguard was great. It could have not been easier. But I've heard good things about Fidelity as well.

 

[pb4uski]

We chose to go with Vanguard for both our 401Ks. I want the simplicity of as few accounts as possible.

Vanguard was great. It could have not been easier. But I've heard good things about Fidelity as well.

+1 I like one due to simplicity. If you like Contrafund I'm pretty sure you could transfer it into your Vanguard IRA but you should confirm that with Vanguard.

 

[travelover]

My 401(k) was also with Fidelity. They have a brick and mortar store near me and were helpful with rollovers and some other paperwork. As a result, I keep half my stash there in their low cost funds and the rest at Vanguard.

 

[Animorph]

One call and you can transfer the 401k to a Fidelity rollover IRA. I did that, and was able to do it "in kind" as well, so that all my mutual funds made the transfer. I didn't have to sell anything. Vanguard is fine also, and should be able to do the same, but may not have all of your existing funds.

Decide what funds you want in your rollover, check out what's available at Vanguard and Fidelity, and transfer to the one you want.

 

[Alan]

One call and you can transfer the 401k to a Fidelity rollover IRA. I did that, and was able to do it "in kind" as well, so that all my mutual funds made the transfer. I didn't have to sell anything. Vanguard is fine also, and should be able to do the same, but may not have all of your existing funds.

Decide what funds you want in your rollover, check out what's available at Vanguard and Fidelity, and transfer to the one you want.

Similar experience here, DW rolled hers over to Fidelity, and I rolled mine to VG.

You can know ahead of time which funds you want to roll to, or simply roll to a money market fund and then split it up.

With DW it was TRowe Price that managed the 401k and the Fidelity rep called up TRP with DW on the line, they had a 3-way conversation and it was all done in a matter of minutes, rolled to the target fund she had already decided on. (the funds took some days to travel down the wires to complete the transaction)

 

[glinka]

It's not that I'mdisappointed with Fidelity funds, they are good, but keep hearing how great Vanguard costs are. Is that enough to rollover 401k? At the Vanguard site they allow you to compare similar funds costs and there is a good difference.

 

[dmdunca44]

The othr thing is that when we rolled our 401K to VG, we were able to keep the same funds we already had.

In time, after I did some research and discovered how much less the ER's of VG funds, I moved to similar lower expense VG funds. But that was my choice.

 

[Finance Dave]

I'd recommend one fund for simplicity.

As to which, there are benefits to each, and everyone has their own opinion. I have Vanguard, but mainly because my MegaCorp uses them as our 401k vendor. My dad has Fido and likes them. A recent Kiplinger article rated Fido as very low in customer service...I think it was the November issue of Kiplinger Personal Finance.

 

[travelover]

It's not that I'mdisappointed with Fidelity funds, they are good, but keep hearing how great Vanguard costs are. Is that enough to rollover 401k? At the Vanguard site they allow you to compare similar funds costs and there is a good difference.

I use the so called Spartan funds at Fidelity. They are cheaper or as cheap as Vanguard. For something like a S&P 500 index fund, it seems like a commodity.

 

[glinka]

When moving from 401k is it better to go to IRA or keep as 401k. Heard that the costs are even lower for IRA. Also, are they talking about regular or Roth IRA?

 

[FinanceDude]

When moving from 401k is it better to go to IRA or keep as 401k. Heard that the costs are even lower for IRA. Also, are they talking about regular or Roth IRA?

IRA, you can self-direct, which is always better.

 

[pb4uski]

When moving from 401k is it better to go to IRA or keep as 401k. Heard that the costs are even lower for IRA. Also, are they talking about regular or Roth IRA?

Generally the IRA because in most cases you would have a broader array of investment choices and lower expense ratios than in a 401k.

The only exceptions that I can think of are 1) IF you left after 55 but before 59 1/2, your plan allows penalty free withdrawals if you leave after 55 (not all plans do) and you need access to the 401k money for living expenses or 2) if you are a defendant in pending or threatened litigation.

 

[steelyman]

All of my 403(b) funds were and are with Fidelity, split between traditional and Roth contributions. I decided to move the traditional funds to an IRA (still with Fidelity), but since the fund selection was good to start with, I just left the investments as they were. One change that occurred is that they (Fidelity) had automatically transferred certain fund shares to "K class", and those reverted to the "normal class" in the rollover. Their advertised expense ratios (last I looked) for a fund like Spartan Total Market was 0.10% (normal/FSTMX) vs. 0.06% (K/FSKTX). The funds that were left in the Roth 403(b) retain the K designation. I'm planning on leaving things as-is for a while... plus, I don't spend as much time looking at investments these days.

 

[Alan]

When moving from 401k is it better to go to IRA or keep as 401k. Heard that the costs are even lower for IRA. Also, are they talking about regular or Roth IRA?

Generally the IRA because in most cases you would have a broader array of investment choices and lower expense ratios than in a 401k.

The only exceptions that I can think of are 1) IF you left after 55 but before 59 1/2, your plan allows penalty free withdrawals if you leave after 55 (not all plans do) and you need access to the 401k money for living expenses or 2) if you are a defendant in pending or threatened litigation.

What he says

You don't want to roll straight to a ROTH IRA as that would be a big tax hit.

 

[jazz4cash]

When moving from 401k is it better to go to IRA or keep as 401k. Heard that the costs are even lower for IRA. Also, are they talking about regular or Roth IRA?

You can only go to the 401k of your current employer, but you can go to any provider's IRA.


I also have a GM 401k with Fidelity. Although I prefer Vanguard, I have found Fidlity to be excellent. I have rolled a portion of my 401k to a Fidelity IRA (some of the funds are the same, but I can put anything I choose into the IRA portion). The advantages for me are:

1. When I log in to Fidelity, I can view both the 401k and the IRA.
2. I can still access the 401k loan provision in an emergency.
3. In addition to putting anything I want in the IRA, I can withdraw penalty free for dependent college tuition.