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Old 01-07-2014, 11:19 AM   #21
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I would *not* roll the old 401(k) to the new company. Since you like the funds, and presumably have a decent sum of $ in there, I'd let it ride if you have enough in to allow it. If not, I'd roll it to a self directed IRA at Vanguard, Fidelity, Schwab, or some other low expense brokerage. You don't have to do this right away... you can do this after you change jobs.

Does your new company's 401k offer a stable value fund. That's basically like a CD with better interest rates - and is pretty much only found in 401k plans. When my division was bought last year we went from a very low expense 401k to one with much higher expenses - but they had a stable value fund. I use that fund as part of my cash/fixed income portion of my TOTAL asset allocation. Since it preserves principal and pays interest - it's doing better than the bond funds I have (which lost money.)

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Old 01-07-2014, 03:01 PM   #22
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I'd be with the others and roll the 401k to an IRA that has lower expenses than the new company. Most likely you'll come out ahead that way.

Re the cc debt, generally it's not a good idea to pay it off with retirement funds but a lot depends on your other retirement assets (i.e. is losing the $6k going to make a difference?) how long it will compound before you actually do retire and a bunch of other variables. If you have a ways to go before retirement you may end up losing more in compounding long-term than you save in cc interest charges short-term since you'll have it paid off in a year anyway.

I heard the call to do nothing. So I answered it.
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Old 01-07-2014, 03:34 PM   #23
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Originally Posted by Klubbie View Post
One other thing that has come up for me. I have about $6500 in credit card debt that I am hoping to pay off this year. The bonus check that I am holding out for may cover all of it (doubtful though). If it doesn't, I have a pension with the current firm of about $6000 that will be mine to roll into an IRA and do whatever I want with. Ideally I would roll it into an IRA, however it is very tempting to pay the penalty and taxes on that lump sum and use it and my bonus check to pay off the credit card. Anything left over I would move to the Roth IRA. I would anticipate that even if I had to tap the pension to pay the credit card, there would be some left over. Would anyone else consider doing that to pay off the credit card as a "one time only" type thing?....

Good question. Even if using the pension looks good economically on paper, I think you need to tighten your belt and get the cc debt paid off the old fashioned way. You can't put the $ back in the pension, and you will pay as much in penalties and taxes to pull the pension money out as you would in interest on the cc debt. But more importantly the pain of paying it off from your income will psychologically reinforce not getting into this situation in the first place. It is not a debilitating amount to pay off--put the increase in your salary toward it plus what you would ordinarily pay, until it is gone.

Keep us posted on the new job.
Go Cubs
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Old 01-07-2014, 04:30 PM   #24
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Originally Posted by rodi View Post
I would *not* roll the old 401(k) to the new company. Since you like the funds, and presumably have a decent sum of $ in there, I'd let it ride if you have enough in to allow it. If not, I'd roll it to a self directed IRA at Vanguard, Fidelity, Schwab, or some other low expense brokerage. You don't have to do this right away... you can do this after you change jobs.
I agree with leaving the 401(k) money at the old employer if the expenses are low and they allow you to keep it there. It gives you the maxiumum flexibility since you can move it from old employer's 401(k) to current employer's 401(k) any time you want, and also from old employer's 401(k) to self directed IRA any time you want. The "flexibility" I'm talking about is being able to pull from the 401(k) account penalty free in the year you turn 55. At 31, that's probably not on your radar. But I just moved 401(k) money from an employer I left in 1999 to my current 401(k). I turn 55 this year!

As to selecting a fund for your 401(k) additions, you're young. Take the index fund with the highest beta and rack up some dollar cost averaging. But set your contribution to ZERO until you get that credit card paid off!
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Old 01-08-2014, 02:28 AM   #25
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Move on but do not accept the first job offer that comes around.
You will regret a lateral move once the first problems become visible in the new job - and there will be problems, as they are everywhere.

Invest some time in carreer research, maybe coaching and networking.
At one point in my work life I invested 150% of my monthly salary in excellent coaching. It turned out to be the best investment I ever made. It helped me evaluating my situation, finding a great next job and the even better job after that.
Try to find a really good coach. Mine was an outplacement expert I have met through my job. When my employer chose another one for his needs I asked the other expert that I had evaluated if he would advise me on my own outplacement project.

Another one: Be extremely careful with your boss boss. Confirm the content of the friendly phone calls by extremely friendly email. Store mails so that you always have access.

Good luck!
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Old 01-08-2014, 05:06 PM   #26
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I had a manager screaming at me at the top of his lungs 2 months ago. He is now gone today. I am glad I stuck it out this once, but I am on a remote island with the alternative being a very snowy climate I used to call "home".

I feel like between 30-45 are your high earning years, and you definitely want to take risks. They usually work out. Here's a fun stat:

Income gain: 19.37% /yr for past 6 6yrs for me. I don't know what the S&P avg was over the same period but I sure feel like I am winning. I am 32 and hoping to keep this trend up until I am in mid to late 40's and hopefully retire by 50.

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Old 01-20-2014, 11:25 AM   #27
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Thanks for all the feedback. I like the idea of using the 401k at the new company as a "cash reserve" so to speak and leaving the existing 401k with the old firm. I have a fair amount in my current 401k in a stable value fund right now as I had sold/rebalanced in the fall.

So I think I'll just use the new 401k to do the same thing, just with the new firm obviously.

I also appreciate the feedback on keeping the pension in IRA/retirement account rather than using to pay the credit card down. I am going to do that. Hoping my tax return and bonus will cover ccard debt. If it doesn't that's fine, I will be able to pay it down this year. I plan to contribute just 4% to the new 401k to get their match until the c card debt is gone.

My plans to resign at the current job are thrown out of whack a little bit. Bonuses still haven't been distributed yet or even finalized. This is much later than normal. However apparently the board of directors is supposed to vote on it Tuesday. I am going to have to turn my notice in this coming Friday which is earlier than I had hoped since my boss will be traveling the following week. I had hoped to wait until first thing Monday morning (the 27th), but instead I plan to tell him end of day Friday after hours. I am a little worried that may impact my ability to get my bonus payout, that the company could still find a way to withhold, but at this point I can't keep the new employer waiting much longer.
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Old 02-19-2014, 08:12 AM   #28
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Originally Posted by Klubbie View Post
Thanks for all the feedback. I like the idea of using the 401k at the new company as a "cash reserve" so to speak and leaving the existing 401k with the old firm. I have a fair amount in my current 401k in a stable value fund right now as I had sold/rebalanced in the fall.
When do you plan to RE? I know that we had a great year for equities last year, but at your young age, you can also afford to be a little riskier (my opinion and strategy).

You don't mention your AA, but you mention a fair amount in the stable value fund with your current employer. Just make sure your AA is not out of whack, you are free to rebalance your old 401(k) even after leaving your employer, so don't move your money to the new 401(k), rather leave money in the old 401(k), but at your desired AA and not all in stable value.

I left one Megacorp for another a little more than a year ago. In my experience, professional (scientist but not MBA), I was able to negotiate my total compensation up by 20%, it is not impossible. Vacation unfortunately was harder to negotiate more than I had...
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Old 02-19-2014, 07:46 PM   #29
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Other than your 401K and other financial considerations, IMHO, I cannot see the problem. Based on what you say your working conditions are, you have no choice but to leave. Even if they were to offer you more money or a hundred thousand perks, it's not going to change this terrible environment you are currently working in.

Nothing is worth putting up with that mess. Conditions like this cannot only lead to, as was stated, heart attacks, but I have seen too many go out with nervous breakdowns based on job conditions such as this.

Good luck to you.
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Old 03-01-2014, 12:31 PM   #30
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Hi all, wanted to follow up as I am in the new job now for a couple weeks and those who have asked about asset allocation.

Regarding asset allocation: The majority of the time I was at my last job I had an asset allocation that looked like this:

40% S&P fund
15% Small cap
10% Large value
10% International Large
10% International Small
10% Emerging Markets
5% Company stock

I actually bought back into this allocation before I left. I decided my use of the stable value fund was more due to me thinking I could time the market and I wanted a cash reserve for that. But I am/have (slowly) realized my financial intelligence is not what I think it is so I am moving on from that mindset.

All were index funds with low expense ratios(except company stock which had no expense ratio associated with it).

I compared the expense ratios of the company indexes vs. the ETF's I have in my IRA with TD Ameritrade, and they are comparable. With TD Ameritrade I have mostly bought all Vanguard or Ishares ETF's and rebalanced once or twice a year, so I am leanings towards rolling the 401k into an IRA that would look like this:

Total Stock Market ETF (VTI) 55%
Small Cap ETF (VB) 15%
Emerging Markets (VWO) 10%
International Large Cap (VEU) 10%
International Small cap (VSS) 5%

The expenses on those ETF's are identical to what was in the 401k with the exception of VTI. That ER is .05 vs. 04 for the S&P fund I had, and I prefer VTI over S&P anyways.

I have been reluctant to move into bonds at this point as I feel my investment horizon is still long enough to be 100% equities. I am leaning toward moving towards a 70/30 equities/bonds allocation by the time I am 40, and then 60/40 at 45 and leaving it. But I am admittedly not sure how to handle that yet. If there was one lesson I learned in my 20's it's that I don't know as much about investing and finances as I thought I did so I am in the process of educating myself on these things with the Bogleheads books and some of the other recommended readings on this site. It is very humbling because I have learned I am not as smart as I thought I was, and I am okay with that. Life is much better, and simpler following the methods of those in these forums when it comes to investing.

Either way, I may reconsider my 100% equity allocation when I rebalance in late 2014/early 2015 but am definitely open to opinions on that. My feeling is that my time horizon is still long enough to be all equities as long as I plan to transition to either 70/30 or 60/40 over the next decade or so.

I am leaning towards ER in my mid-50's at this point. My girlfriend and I are moving in together and should be engaged this year (I plan to propose this year) so we are in the process of aligning financial goals and need to figure out what that time frame looks like for when we factor in having kids and some of other life/career goals.

And as a follow up, my credit card will be paid off on Tuesday which means the debt I am carrying now is a car loan and a student loan. I consider those unfortunate necessities of life. I will be paying extra towards both, but also ramping up other saving as well. The plan is to max the 401k at the new employer now (75% S&P Index fund and 25% All International Index fund), and save as much as I can in the Roth too. The new employer does offer an HSA which I have not had previously so I am contributing to that. I am going to consider maxing it out, but I am not sure if I can yet. I am not sure if I will be able to max my Roth IRA either because I am also going to continue saving for an engagement ring and also now a down payment on a house. I previously owned a house and hated paying mortgage insurance. I would really like to get back into owning a house instead of renting, but I desperately want to avoid paying mortgage insurance.

Also, I did not have to touch the pension I mentioned in earlier posts to pay off the credit card. I ended up getting a bigger tax return than expected (my dad, who used to do taxes found another mortgage interest deduction I could use this year from when I sold my house), and the new employer paid me for the entire second half of February. My start date was the 18th and I thought they'd pro rate it but they didn't. Probably because I was working every business day after the 2/14 payout.

So far the new job is good. I will say I can see the difference between the companies I was at, but I am wary (in general) of corporate America. The work is challenging and more interesting so far. It took them a week to get me a computer so I really only started working on Friday. Next Friday the girl who is training me is leaving, and I am the only person on my team to perform my job function. So it will be interesting to see how things develop. But I feel less stressed so far as I am an individual contributor again for the time being instead of a manager, and the new employer is 10,000 employees instead of 250,000 employees. Things are a bit flatter and I like that.

On my last day at the old job my bosses boss called to wish me well and I was as polite as I could be to her. After I got off the phone with her my coworker in the cube over commented how I sounded like I was uninterested in her call, but not rude. (truth is I could have). I feel bad about that as that was not my intent, but I guess the bright side is I wasn't rude at least.

Anyways, sorry for the long winded post. I just wanted to answer some other questions and follow up with everything.

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