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Finance & Stock Groups Forum Index » Mutual Funds » Should I rollover my 401K?
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Message |
| sawyervillers@gmail.com |
 Posted: Fri Jul 27, 2007 4:14 am |
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Guest
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Need some advice--
1) I am leaving my company. I have $100k+ in a 401K invested in some
fairly decent mutual funds through my company's plan
2) I can leave my money with my company indefinitely or roll it into
my Vanguard account.
I am age 35, so I'll definitely have another job.
My preference would be to direct roll my 401K into Vanguard. It will
make it easier to have a single point of contact (plus I won't have to
deal with my old company). I will only do this, though, provided
there are no negative consequences (either financial or limitations to
choice).
Ultimatly, I'll turn my 401K into a Roth 401K. I can do that at
either my company or in Vanguard.
--Dylan |
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| Andrew Koenig |
| Posted: Fri Jul 27, 2007 7:21 am |
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<sawyervillers@gmail.com> wrote in message
news:1185495243.242440.293940@r34g2000hsd.googlegroups.com...
Quote: My preference would be to direct roll my 401K into Vanguard. It will
make it easier to have a single point of contact (plus I won't have to
deal with my old company). I will only do this, though, provided
there are no negative consequences (either financial or limitations to
choice).
How much of your 401k is after-tax money? How much is in your employer's
stock? |
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| Guest |
| Posted: Fri Jul 27, 2007 10:30 am |
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On Jul 26, 8:14 pm, "sawyervill...@gmail.com"
<sawyervill...@gmail.com> wrote:
Quote: Need some advice--
1) I am leaving my company. I have $100k+ in a 401K invested in some
fairly decent mutual funds through my company's plan
2) I can leave my money with my company indefinitely or roll it into
my Vanguard account.
I am age 35, so I'll definitely have another job.
My preference would be to direct roll my 401K into Vanguard. It will
make it easier to have a single point of contact (plus I won't have to
deal with my old company). I will only do this, though, provided
there are no negative consequences (either financial or limitations to
choice).
Ultimatly, I'll turn my 401K into a Roth 401K. I can do that at
either my company or in Vanguard.
--Dylan
I think it all comes down to fees and choice of investment. If your
employer will maintain your account for free and they have good
investment choices then let it ride but that is probably not the
case. Vanguard may be cheaper to maintain since you have an active
account with them, your investment choices should be in a greater
variety and as you said one point of contact. You know best because
you see the little details in front of you but based on what you've
said, I say roll it over. |
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| Steven L. |
| Posted: Sat Jul 28, 2007 3:09 am |
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sawyervillers@gmail.com wrote:
Quote: My preference would be to direct roll my 401K into Vanguard. It will
make it easier to have a single point of contact (plus I won't have to
deal with my old company). I will only do this, though, provided
there are no negative consequences (either financial or limitations to
choice).
Ultimatly, I'll turn my 401K into a Roth 401K. I can do that at
either my company or in Vanguard.
"First of all, you can't rollover your 401k directly into a Roth. You
have to rollover the 401k into a Rollover/Traditional IRA then convert
that IRA to a Roth. The company that currently handles your Roth [which
sounds like Vanguard in your case] should have all the paperwork for that.
"If you leave the rollover amount as a rollover/traditional IRA you
don't pay the tax on it now. If you do the conversion, then you pay
income tax on the distribution, i.e. the amount of the conversion. The
distribution (20k) is taxed as regular income, therefore it is added to
your AGI [Adjusted Gross Income]."
http://forums.kiplinger.com/showthread.php?t=3576
But the good news is that Vanguard will offer you more and better
choices of investments than you could get with most employer 401(k)s.
--
Steven D. Litvintchouk
Email: sdlitvin@earthlinkNOSPAM.net
Remove the NOSPAM before replying to me. |
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| Flasherly |
| Posted: Sat Jul 28, 2007 3:23 am |
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On Jul 26, 8:14 pm, "sawyervill...@gmail.com"
<sawyervill...@gmail.com> wrote:
Quote: Need some advice--
1) I am leaving my company. I have $100k+ in a 401K invested in some
fairly decent mutual funds through my company's plan
2) I can leave my money with my company indefinitely or roll it into
my Vanguard account.
I am age 35, so I'll definitely have another job.
My preference would be to direct roll my 401K into Vanguard. It will
make it easier to have a single point of contact (plus I won't have to
deal with my old company). I will only do this, though, provided
there are no negative consequences (either financial or limitations to
choice).
Ultimatly, I'll turn my 401K into a Roth 401K. I can do that at
either my company or in Vanguard.
--Dylan
Funny - this lists Vanguard for a premium service (as opposed to full-
service or discount services). Looking at potential for faster trader
services and ran into this survey fwiw
http://www.smartmoney.com/brokers/index.cfm?story=august2007 |
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| sawyervillers@gmail.com |
| Posted: Sat Jul 28, 2007 11:37 pm |
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On Jul 27, 6:23 pm, Flasherly <gjerr...@ij.net> wrote:
Quote: On Jul 26, 8:14 pm, "sawyervill...@gmail.com"
sawyervill...@gmail.com> wrote:
Need some advice--
1) I am leaving my company. I have $100k+ in a 401K invested in some
fairly decent mutual funds through my company's plan
2) I can leave my money with my company indefinitely or roll it into
my Vanguard account.
I am age 35, so I'll definitely have another job.
My preference would be to direct roll my 401K into Vanguard. It will
make it easier to have a single point of contact (plus I won't have to
deal with my old company). I will only do this, though, provided
there are no negative consequences (either financial or limitations to
choice).
Ultimatly, I'll turn my 401K into a Roth 401K. I can do that at
either my company or in Vanguard.
--Dylan
Funny - this lists Vanguard for a premium service (as opposed to full-
service or discount services). Looking at potential for faster trader
services and ran into this survey fwiw
http://www.smartmoney.com/brokers/index.cfm?story=august2007- Hide quoted text -
- Show quoted text -
Does the 401K over any advantages over a Traditional IRA or Roth IRA?
I was told it has more flexibility, but I can't find any literature.
Answering a question above--All the money is pre-tax, and none of it
is in company stock.
Followup Question--Do I pay the Mutual Fund Fees when enrolled in a
401K? Vanguard has the lowest Expense Ratios around, so I could
probably save myself 0.4% just by switching (the majority of money is
in large index funds--international, SP500, emerging markets, small
cap--and I don't need to pay a big fee for that).
Thx again-D |
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| Steven L. |
| Posted: Sun Jul 29, 2007 3:54 am |
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sawyervillers@gmail.com wrote:
Quote: On Jul 27, 6:23 pm, Flasherly <gjerr...@ij.net> wrote:
On Jul 26, 8:14 pm, "sawyervill...@gmail.com"
sawyervill...@gmail.com> wrote:
Need some advice--
1) I am leaving my company. I have $100k+ in a 401K invested in some
fairly decent mutual funds through my company's plan
2) I can leave my money with my company indefinitely or roll it into
my Vanguard account.
I am age 35, so I'll definitely have another job.
My preference would be to direct roll my 401K into Vanguard. It will
make it easier to have a single point of contact (plus I won't have to
deal with my old company). I will only do this, though, provided
there are no negative consequences (either financial or limitations to
choice).
Ultimatly, I'll turn my 401K into a Roth 401K. I can do that at
either my company or in Vanguard.
--Dylan
Funny - this lists Vanguard for a premium service (as opposed to full-
service or discount services). Looking at potential for faster trader
services and ran into this survey fwiw
http://www.smartmoney.com/brokers/index.cfm?story=august2007- Hide quoted text -
- Show quoted text -
Does the 401K over any advantages over a Traditional IRA or Roth IRA?
I was told it has more flexibility, but I can't find any literature.
The limit on contributions to a 401(k) is much higher than for an IRA.
(But that issue is moot for your 401(k) now.) You can borrow against
your 401(k) without penalty, something you can't do with an IRA. In
extraordinary conditions, the government will even let you liquidate
some of the 401(k) before retirement without paying taxes. Those are:
disability; or if you need to pay heavy medical expenses beyond what's
already deductible on your income tax. (An IRA lets you liquidate up to
$10,000 only for the down payment on a home by first-time home buyers.)
Quote: Followup Question--Do I pay the Mutual Fund Fees when enrolled in a
401K?
In my experience, it varies. Check with the particular funds in your
401(k) for their policy. Or ask the Human Resources Department of your
former employer. But again, at this point it's moot. Either you were
charged fees when you purchased the shares in the funds in the 401(k),
or you weren't. Either way you're not going to be charged any more fees
at this point by those fund companies if you rollover to someone else's
IRA. (Unless your employer was dumb enough to choose Class C shares,
and you were dumb enough to invest in them. I don't even know if that's
possible with a 401(k). Like I said, ask your former employer, or the
mutual fund families themselves, for details.)
--
Steven D. Litvintchouk
Email: sdlitvin@earthlinkNOSPAM.net
Remove the NOSPAM before replying to me. |
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| FrediFizzx |
| Posted: Sun Jul 29, 2007 9:50 am |
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Guest
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<sawyervillers@gmail.com> wrote in message
news:1185660149.301310.192200@g12g2000prg.googlegroups.com...
Quote: On Jul 27, 6:23 pm, Flasherly <gjerr...@ij.net> wrote:
On Jul 26, 8:14 pm, "sawyervill...@gmail.com"
sawyervill...@gmail.com> wrote:
Need some advice--
1) I am leaving my company. I have $100k+ in a 401K invested in
some
fairly decent mutual funds through my company's plan
2) I can leave my money with my company indefinitely or roll it
into
my Vanguard account.
I am age 35, so I'll definitely have another job.
My preference would be to direct roll my 401K into Vanguard. It
will
make it easier to have a single point of contact (plus I won't have
to
deal with my old company). I will only do this, though, provided
there are no negative consequences (either financial or limitations
to
choice).
Ultimatly, I'll turn my 401K into a Roth 401K. I can do that at
either my company or in Vanguard.
--Dylan
Funny - this lists Vanguard for a premium service (as opposed to
full-
service or discount services). Looking at potential for faster
trader
services and ran into this survey fwiw
http://www.smartmoney.com/brokers/index.cfm?story=august2007
Does the 401K over any advantages over a Traditional IRA or Roth IRA?
I was told it has more flexibility, but I can't find any literature.
Answering a question above--All the money is pre-tax, and none of it
is in company stock.
Followup Question--Do I pay the Mutual Fund Fees when enrolled in a
401K? Vanguard has the lowest Expense Ratios around, so I could
probably save myself 0.4% just by switching (the majority of money is
in large index funds--international, SP500, emerging markets, small
cap--and I don't need to pay a big fee for that).
You probably should do yourself a favor and hire a good independent
certified financial planner. But if it were me, I would rollover the
401K to a discount broker that gives you a wider choice of investments.
I did it last year and went with Schwab because my wife already had an
account with them for 10 years on the advice of a very good CFP.
Fred |
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