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Move 401K from Company to Vanguard
Old 07-01-2014, 01:31 PM   #1
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Move 401K from Company to Vanguard

Hi All,

Am over 59 1/2 and have 401K at major aerospace company.

Probably 2-3 years from pulling the plug.

Also have defined benefit retirement from Company and military retirement.

Our 401K options are very limited, but also very low cost - about same as Vanguard's non-Admiral funds.

Would like to have more flexibility on types of funds ...does this seem like a reasonable time to move the money?

Would like to hear what you all think.

Thanks.

George
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Old 07-01-2014, 01:36 PM   #2
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Are you even allowed to rollover a 401K while working at the company? I've never seen that before. Usually you can't withdraw or rollover while still employed by that same company.

Outside of that, there are an awful lot of tax considerations (Traditional to Roth?) depending on the type of conversion/rollover you want to do. But I doubt it's even possible for you right now. I could be very wrong.
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Old 07-01-2014, 01:40 PM   #3
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Quote:
Originally Posted by nash031 View Post
Are you even allowed to rollover a 401K while working at the company? I've never seen that before. Usually you can't withdraw or rollover while still employed by that same company.

Outside of that, there are an awful lot of tax considerations (Traditional to Roth?) depending on the type of conversion/rollover you want to do. But I doubt it's even possible for you right now. I could be very wrong.
+1

I wasn't able to roll my 401k to Vanguard until after I had left the company.

If you do a rollover directly into an IRA (not a ROTH) there is zero tax to pay.
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Old 07-01-2014, 01:47 PM   #4
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Are you even allowed to rollover a 401K while working at the company? I've never seen that before. Usually you can't withdraw or rollover while still employed by that same company.

Outside of that, there are an awful lot of tax considerations (Traditional to Roth?) depending on the type of conversion/rollover you want to do. But I doubt it's even possible for you right now. I could be very wrong.
I did and many others(close to 50 that I talked to) did from the same Megacorp. You had to be age 50 or more. There was one oddity to the 401k, you couldn't pull out the match IIRC. When they wanted the old gaurd to leave they made it easier to find your way to the exit.
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Old 07-01-2014, 02:13 PM   #5
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IRAs Could Be Fair Game in LawsuitsÂ*-Â*Los Angeles Times

Keeping money in 401k has its advantages. Personally I would never move money from 401k into IRA.
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Old 07-01-2014, 03:09 PM   #6
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I started a thread on same subject a few months ago. "401k decision to be made."
Good input.
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Old 07-01-2014, 04:41 PM   #7
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IRAs Could Be Fair Game in LawsuitsÂ*-Â*Los Angeles Times

Keeping money in 401k has its advantages. Personally I would never move money from 401k into IRA.
If the 401K was being shut down, that would be a good reason to roll it over to an IRA. BTDT. Otherwise you would likely get a distribution along with the potential penalty and taxes due.

Never is a long, long time.
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Old 07-01-2014, 04:52 PM   #8
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If the 401K was being shut down, that would be a good reason to roll it over to an IRA. BTDT. Otherwise you would likely get a distribution along with the potential penalty and taxes due.

Never is a long, long time.
Yea but that is not "likely" to happen. I always kept 401k with old Megacorp without moving it.

One Megacorp did go belly up. It got acquired by another one and with it 401k moved without being shut down.

Another thing to keep in mind that something like S&p 500 index can be actually cheaper then Vanguard ETFs. IE 0.01% or 0.02%. So here company 401k can be advantageous.....
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Old 07-01-2014, 04:52 PM   #9
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IRAs Could Be Fair Game in LawsuitsÂ*-Â*Los Angeles Times

Keeping money in 401k has its advantages. Personally I would never move money from 401k into IRA.
Too bad that link's link to state laws does not work.

I've heard VG has a "Rollover IRA" that gets 401k-like protection, but I have doubts since I could find no collaborating info online.
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Old 07-01-2014, 06:55 PM   #10
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Many 401(k) plans allow in-service rollovers for employees who are age 59.5 and older.

In-service 401(k) rollover not for everyone | Dallas Morning News
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Old 07-01-2014, 07:00 PM   #11
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My 401k gives me access to a couple of otherwise closed/institutional class (lower expense) funds that I'd like to keep so I plan to leave my money there. Something to consider if you are invested in any that aren't available to the public or would have higher fees in the retail world.
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Old 07-01-2014, 07:15 PM   #12
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What about a 'self directed' option within the 401k plan?

That opens up a whole lot of opportunities.
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Old 07-01-2014, 08:21 PM   #13
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When I did my rollover from a 401k to an IRA upon leaving my company and ERing in 2008, I had to liquidate the entire account because I had chosen the NUA option on the company stock in the account. I had to cash out the stock (NUA means I could take most of the stock's value in LTCG) but I did a rollover on all the remaining pretax, company match, and earnings dollars. I had some after-tax dollars in there, too, but I cashed that out without any penalty or fee. The rollover went trustee-to-trustee to Fidelity.
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Old 07-01-2014, 08:39 PM   #14
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The only option my wife's 401k has for withdrawals is it has to be rolled over to an IRA, and then take the withdrawals, or else take all the money out in a lump sum. It sucks. They also apparently don't subscribe to the "retire during or after the year you turn 55" rule either, which allows for no 10% early withdrawal penalty. I can't wait for her to get outta that sucky plan. She wants to work another 2 years, though......
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Old 07-01-2014, 09:26 PM   #15
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Many 401(k) plans allow in-service rollovers for employees who are age 59.5 and older.

In-service 401(k) rollover not for everyone | Dallas Morning News
In my Mega Corp there was a school of sharks (financial advisers that followed Mega Corp and appeared to know all the rules and who was close to retirement) that aggressively sold in-service 401K rollovers. They wanted you to roll over your 401K and let them handle it.
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Old 07-02-2014, 04:37 AM   #16
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My spouse and I worked for a megacorp many years ago. They recently changed their 401k that any investment choices other than a set of crappy proprietary choices would incur an account surcharge quarterly, so we did an out-of-service rollover. Barring something like that, I'd make-do with leaving the money in the 401k for the reason eta2020 alluded to. In-service roll-overs are a nice choice, but 401k plans are not required to provide them, not even for those over 59 1/2.
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Old 07-02-2014, 08:27 AM   #17
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IRAs Could Be Fair Game in LawsuitsÂ*-Â*Los Angeles Times

Keeping money in 401k has its advantages. Personally I would never move money from 401k into IRA.
With the terrible investment options, high expenses, and inflexible withdrawal rules of many (not all) 401Ks, it clearly makes a lot of sense to jump out of them and into an IRA at the earliest convenient opportunity.
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Old 07-02-2014, 08:29 AM   #18
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With the terrible investment options, high expenses, and inflexible withdrawal rules of many (not all) 401Ks, it clearly makes a lot of sense to jump out of them and into an IRA at the earliest convenient opportunity.
Depending on the individual tax implications, I agree with this.
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IRA Asset Protection - by state
Old 07-02-2014, 08:45 AM   #19
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IRA Asset Protection - by state

Believe I picked this off another thread here - thought it might be of interest to those questioning the legal protection of a rollover IRA or a Roth.

IRA/Roth Asset Protection - by state

IRA Asset Protection | Self Directed IRA | IRA Creditor Protection | IRA Bankruptcy Protection | www.irafinancialgroup.com
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Old 07-02-2014, 09:20 AM   #20
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Megacorps usually have pretty good 401k with some common indexes with fees lower then what you can buy on open market. Index like VXUS or S&P 500.

From my work experience it is small companies that have lousy choices and high fees. In such case moving assets to IRA makes lot of sense.
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