Convert 401k to IRA?

[kaneohe]

kaneohe,

........................................................

P.S.--As you note with "a few exceptions," even ERISA plans are not ironclad. ..................................

The few exceptions that seem to be mentioned are IRS/tax liens and QDROs.
Not afraid of IRS so all I need to do is treat DW well. After 40+ yrs, I hope
I've learned enough to do the latter so hopefully I'm in good shape.
I think it boils down to ERISA seems to have some additional benefits....whether they are practical benefits in the real world, I'm not sure.

The benefits often mentioned for IRAs......greater choices, lower cost, etc. don't
necessarily have benefits for me since my 401K seems to be reasonably priced and I just need a few low cost choices which I have. ymmv............

 

[2017ish]

The few exceptions that seem to be mentioned are IRS/tax liens and QDROs.
Not afraid of IRS so all I need to do is treat DW well. After 40+ yrs, I hope
I've learned enough to do the latter so hopefully I'm in good shape.
I think it boils down to ERISA seems to have some additional benefits....whether they are practical benefits in the real world, I'm not sure.

The benefits often mentioned for IRAs......greater choices, lower cost, etc. don't
necessarily have benefits for me since my 401K seems to be reasonably priced and I just need a few low cost choices which I have. ymmv............

Amen on the treating DW right. (In my case though, she's the one with the bucks, so she better treat me right too!) Sounds like in your situation, not rolling over works well. DW's plan is definitely one we will get the money out of as soon as she exits, unless we succeed on our windmill tilting and get it changed. Arguably the most important acronym in personal finance: ymmv.

 

[fishboat]

rollover isn't the problem..

OP..As others have said..the rollover isn't the problem..it's just the funds you're picking.

You sound like a great candidate for index-centric investing (also suggested to some extent by others here).

Here's some worthwhile reading:
https://www.bogleheads.org/wiki/Main_Page

Or cut to the chase (Fidelity has index funds to match any of the Vanguard index funds):
The Three Fund Portfolio - Bogleheads

Specifics on the 3 fund portfolio (note the Fidelity funds listed down below):
https://www.bogleheads.org/wiki/Three-fund_portfolio

The biggest decision you'll need to make is your asset allocation (72/25 equities/bonds, 70/30, 60/40..etc..). After that it's easy. Your fees will run less than 0.20%.

No muss, no fuss, and inexpensive.

 

[hnzw_rui]

OP..As others have said..the rollover isn't the problem..it's just the funds you're picking.

You sound like a great candidate for index-centric investing (also suggested to some extent by others here).

Here's some worthwhile reading:
https://www.bogleheads.org/wiki/Main_Page

Or cut to the chase (Fidelity has index funds to match any of the Vanguard index funds):
The Three Fund Portfolio - Bogleheads

Specifics on the 3 fund portfolio (note the Fidelity funds listed down below):
https://www.bogleheads.org/wiki/Three-fund_portfolio

The biggest decision you'll need to make is your asset allocation (72/25 equities/bonds, 70/30, 60/40..etc..). After that it's easy. Your fees will run less than 0.20%.

No muss, no fuss, and inexpensive.

+1. Seems like the major firms now offer their own index mutual funds/ETFs.

Question, does your the 401k account offer a self-directed option? Might want to consider that.

Fund options recently changed in our 457b plan and all but one of the ERs went up so I was thinking of rolling over contributions to my IRA at the end of every year (the plan allows in-service withdrawals). However, our plan also offers a Schwab Self-Directed Brokerage Account (SDBA)/Personal Choice Retirement Account (PCRA) option. I was planning on just buying Vanguard index funds and/or ETFs on the IRA but learned Schwab has their own versions. ER for Schwab was around the same or ever so slightly lower than Vanguard's so in the end, I just went with the SDBA option instead of rolling over to IRA. Much less hassle and paperwork required. I could actually still get Vanguard ETFs. Just wasn't worth it to pay the $8.95 trading fee for each non-Schwab OneSource ETF since it's got a fairly small balance at the moment and I'm only contributing $5000 annually for now (will be increasing it every year along with my step increases thanks to a recent promotion).

 

[Fermion]

Protection fails when you do stuff like buy a house for your personal use using your IRA...at least those are the cases I have read about where the IRA assets are attacked.

 

[fishboat]

+1. Seems like the major firms now offer their own index mutual funds/ETFs.

Question, does your the 401k account offer a self-directed option? Might want to consider that.

Per a Fidelity guy I talked to, Fidelity & Vanguard had a war 5-6 years ago over which firm could offer the lowest cost index funds. I think he said Fidelity won, but I've never checked.

For the OP..my 401k is in Fidelity and the right 3-fund portfolio funds are not offered, but, oddly enough, the Vanguard Target funds are offered. The VG Target funds are made up of the same 3-4 funds that are used in the 3-fund portfolio..the key with the target funds is to pick the asset allocation you prefer rather than the target year. The equity-bond breakdown for each target fund is on the VG site. For example..I'll be retiring in the next year, but my money is in a 2020 Target fund as it has the 60/40 allocation I wanted. (the 2015 fund is about 50/50 I think)

If your 401k doesn't offer the VG Target funds, then look for Fidelity targets or assemble an appropriate allocation out of the index funds that are available.

 

[unno2002]

[FONT=&quot]For those who are paranoid (enough), this site appears to present that you can set up a “CHECKBOOK” IRA, which invests in gold, real estate, or whatever else is not prohibited in the regulations…
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