Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Rollover 401k to IRA or leave as-is
Old 08-04-2015, 10:00 PM   #1
Confused about dryer sheets
 
Join Date: Jul 2013
Posts: 1
Rollover 401k to IRA or leave as-is

My DH (54yo) has a 401k worth about 106k with Fidelity investments - PIMCO-Bond (10k) and Spartan 500 Index (96k).
He is no longer with the employer that offered the 401k and his new employer does not offer any retirement benefits.

My question is, is it better to leave the 401k in Fidelity untouched and just start a new IRA going forward or should he roll the 401k to a IRA?
It's rather unfortunate that he doesn't have a good retirement vehicle now; he had just started making catch-up contributions but now it seems like we are forced to slow down our tax advantaged savings.

I guess my second question then is, is there some retirement vehicle that we may be overlooking that would offer better options than a $6,500/yr contribution?

Thank you all for your help/suggestions/comments
__________________

__________________
Chiara 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 08-05-2015, 12:04 AM   #2
Recycles dryer sheets
 
Join Date: Jan 2015
Posts: 170
One nice thing I have heard about being a Fidelity client is that you can use their Retirement Income Planner (RIP) tool. I am not a Fidelity client though, so I can not use their RIP tool, and have no review of it personally.
__________________

__________________
Dreaming of Freedom is offline   Reply With Quote
Old 08-05-2015, 12:13 AM   #3
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 3,240
All the providers of IRAs will strongly encourage you to roll over into an IRA (surprise, surprise.) If the choices within the 401(k) are to your liking and the fees are reasonable, there may be reason to stay with the 401(k) assuming the employer doesn't attempt to get you to leave it. I have heard that the 401(k) has the most iron-clad protection against forfeiture to, for instance, a law suit. In my case, I have access to a "stable value" fund which I do not wish to give up. I have rolled some of my 401(k) to IRA(s) but will keep the 401(k) active for the foreseeable future. IOW this is a very personal decision with no absolutes - at least until you do your homework. Good luck and YMMV.
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline   Reply With Quote
Old 08-05-2015, 05:59 AM   #4
Recycles dryer sheets
 
Join Date: Nov 2014
Posts: 381
As a matter of course, I have always rolled over my 401K's from previous employers into a rollover IRA. In my case, all of my previous employers used Fidelity for their 401Ks and my rollover IRA is also at Fidelity. It was literally a phonecall to Fidelity to roll it out of the 401K and into the rollover IRA.

The primary reason I do that is that I'm pretty much always unhappy with the fund selections that the 401Ks provide. Though at one company, the 401K had access to brokeragelink and they allowed up to 90% of my 401K holdings to use it - Brokeragelink was set up such that I had access to all of Fidelity's funds. Even then, after I left the company, I rolled it over. I wanted 100% access.
__________________
big-papa is offline   Reply With Quote
Old 08-05-2015, 06:50 AM   #5
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,040
If you roll it over, you have more investment options and faster access to any money if you need it. You can open a rollover account at Fidelity. I have never left a 401K at an employer.

Just because the 401K is at Fidelity, doesn't mean the employer can't switch it to another firm, change the rules, or even abscond with any funds, especially if it is a small employer.

I worked for one very small employer that said all it takes is one signature to withdrawal all 401K funds.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is online now   Reply With Quote
Old 08-05-2015, 07:24 AM   #6
Recycles dryer sheets
 
Join Date: May 2015
Location: Atlanta suburbs
Posts: 347
It's a very personal decision. You will find advice recommending both sides.

Quote:
Originally Posted by Koolau View Post
All the providers of IRAs will strongly encourage you to roll over into an IRA (surprise, surprise.) If the choices within the 401(k) are to your liking and the fees are reasonable, there may be reason to stay with the 401(k) assuming the employer doesn't attempt to get you to leave it. I have heard that the 401(k) has the most iron-clad protection against forfeiture to, for instance, a law suit. In my case, I have access to a "stable value" fund which I do not wish to give up. I have rolled some of my 401(k) to IRA(s) but will keep the 401(k) active for the foreseeable future. IOW this is a very personal decision with no absolutes - at least until you do your homework. Good luck and YMMV.
+1

Agree with above 100%.

OTOH, IRAs do provide greater choices. But if you are a Bogle follower, this becomes irrelevant, 1-2 stock index funds, 1 bond index fund is enough.

Also, rollovers from Fidelity 401 k to Fidelity IRA is easy. Rollover from Fidelity to another fund company probably means they send you a check.

DISCLAIMER: I did a rollover when I found my 401 k allowed only a one-time withdrawal for all of the money. Now I am chewing my finger nails while the check for most of my lifetime savings is "in the mail".
__________________
DEC-1982 is offline   Reply With Quote
Old 08-05-2015, 07:39 AM   #7
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: 16,387
To me, the only reason to leave a 401k with an employer is if they have a stable value fund that pays a good interest rate (2% in today's terms). In my state, an IRA is as protected if I were sued as a 401k and I have a good sized umbrella policy, so that is not an issue for me.

Another reason might be if one left service after age 55 and the 401k allowed penalty free withdrawals and you needed access to those funds before 59 1/2.

Other than that, I prefer to be in an IRA where I have better access to low cost index funds and can control the money directly.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 08-05-2015, 08:05 AM   #8
Recycles dryer sheets
 
Join Date: Nov 2013
Posts: 354
i left mine because it was a Vanguard 401K and had slightly lower institutional expense ratios than I would get as an admiral customer.


Sent from my iPad using Tapatalk
__________________
jabbahop is offline   Reply With Quote
Old 08-05-2015, 01:36 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
If you want to do a "backdoor" Roth contribution you'll want to leave your money in the 401k so that you have no pre-tax IRA money. That can be a big consideration if your income level is too high for a regular Roth IRA contribution.
__________________

__________________
Animorph is offline   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
Question re: Rollover from High-Fee 401K to IRA, and Possibly to Roth IRA Mo Money FIRE and Money 6 06-27-2015 04:27 PM
How long can you leave home and leave it empty? fh2000 Life after FIRE 123 12-29-2013 07:51 PM
Do you prefer Fidelity or Vanguard for rollover 401k to IRA? spncity FIRE and Money 14 04-28-2007 07:06 PM
401k to IRA rollover problem Andre1969 FIRE and Money 3 01-04-2007 01:17 PM
Creditor Protection 401K/Rollover IRA/etc. kaneohe FIRE and Money 6 03-17-2006 08:48 AM

 

 
All times are GMT -6. The time now is 08:26 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.