Disadvantages of 401k rollover

[Brat]

Because if you go to work for another employer with a 401k that account has clean provenance and is more likely to be accepted into their 401k.

I found it was frankly a waste of paper as rarely will a third party administrator of a 401k accept another account.

 

[veremchuka]

a problem in the 1st sentence? either you meant an IRA /59.5 or 401K/55?

Sorry I was referring to the 401k having the ability to take distributions from age 55 to 59.5 IF you separated (retired, laid off, quit for new job), I'm pretty sure this is a federal rule not just company specific. The rollover IRA 59.5 age restriction is in effect regardless of anything. This is why I left money in my 401k as I was 56 at retirement. I have left it there now for the reason of the stable value yield and the steady nav vs a st bond fund which will suffer nav loss when rates begin to rise tho I wish I could get the 401k money into my rollover IRA at Vanguard just so everything is in one place. Hope this is clear.

 

[rayvt]

My rollover 401k in VG, and DW's rollover 401k in Fidelity are also kept seperate and labeled as Rollover-IRA. This is useful to segregate them from the existing T-IRA's which have non-deductible contributions to keep track of.

But this doesn't help anything. When you make a withdrawal you have to use the total balances of all your IRAs when making the non-deductible contributions calculation. I couldn't find anywhere that the IRS says "except for IRA amounts that were rolled over from a 401k".

 

[Beryl]

I regret rolling over my Fidelity 401K because I miss the Stable Value fund. I don't need to touch it for many years but I wish I'd kept half in that fund.

 

[X501]

On the side of potential benefits of 401Ks
Some megacorp 401Ks benefit from lower cost in index funds than those available in IRAs, even lower than Vanguard. But unfortunately in many cases it is the opposite.
Henry Hebeler in "getting started in anfinanially secure retirement" also mentions, as noted in earlier posts, that some 401Ks have guaranteed income funds that may be more attractive than bond funds.
On the potential downside of 401Ks, they may not be a friendly from an estate point of view, although some now allow contingent benificiaries to be defined.