Who knows about 401Ks?

BusyRaeNOTBusty
BusyRaeNOTBusty Posts: 7,166 Member
in Chit-Chat
If I have an old one at an old employer what is better? Leave it, roll it into IRA, roll in into current 401K? I don't have any extra money to contribute to it currently. I am contributing the max employer matched percentage to my new one.

Replies

  • Return_of_the_Big_Mac
    Return_of_the_Big_Mac Posts: 474 Member
    Always better to roll it into an IRA. You won't be tied to the investment options your new employer provides you and it doesn't impact your "max" since that is for new contributions only.
  • wheird
    wheird Posts: 7,963 Member
    Always better to roll it into an IRA. You won't be tied to the investment options your new employer provides you and it doesn't impact your "max" since that is for new contributions only.

    Exactly this.
  • _crafty_
    _crafty_ Posts: 1,682 Member
    Always better to roll it into an IRA. You won't be tied to the investment options your new employer provides you and it doesn't impact your "max" since that is for new contributions only.

    Exactly this.

    yup yup
  • _Waffle_
    _Waffle_ Posts: 13,049 Member
    It sounds like an unusually long race to me. Just start with a 5k and work your way up from there slowly.
  • BusyRaeNOTBusty
    BusyRaeNOTBusty Posts: 7,166 Member
    I was actually just doing some research and apparently 401ks are protected from creditors (like in the case of a bankruptcy or whatever) and IRAs are not. Not that I plan to be in that situation but I know this feature totally save some one I know who had to declare in his late 40s and is now retired and has his full 401K available.
  • BusyRaeNOTBusty
    BusyRaeNOTBusty Posts: 7,166 Member
    It sounds like an unusually long race to me. Just start with a 5k and work your way up from there slowly.

    Oh, it's only 249miles. That's totally doable.


    It only take me like 5 years.
  • mantium999
    mantium999 Posts: 1,490 Member
    Always better to roll it into an IRA. You won't be tied to the investment options your new employer provides you and it doesn't impact your "max" since that is for new contributions only.

    Exactly this.

    yup yup

    x3
  • Return_of_the_Big_Mac
    Return_of_the_Big_Mac Posts: 474 Member
    I was actually just doing some research and apparently 401ks are protected from creditors (like in the case of a bankruptcy or whatever) and IRAs are not. Not that I plan to be in that situation but I know this feature totally save some one I know who had to declare in his late 40s and is now retired and has his full 401K available.

    You can claim your iRA as exempt in your bankruptcy procedures.

    Also, if you're going bankrupt, your IRA is probably isn't your biggest concern.

    Its like worrying about the kick to the nut after when you're about to be shot in the head.
  • lizzybathory
    lizzybathory Posts: 229
    I rolled my old 401k into an IRA. One unforeseen bad side is that my 401k was a free account with no fees associated, but my IRA charges a quarterly account maintenance fee. It's still only like $35/year, but that's $35 of interest that I'm missing out on.

    Overall though I think the IRA is supposed to be better. Especially for me as a younger person who's never been at a job longer than 3 years, it's easy to just roll everything into that, rather than managing several different 401ks.
  • Return_of_the_Big_Mac
    Return_of_the_Big_Mac Posts: 474 Member
    I rolled my old 401k into an IRA. One unforeseen bad side is that my 401k was a free account with no fees associated, but my IRA charges a quarterly account maintenance fee. It's still only like $35/year, but that's $35 of interest that I'm missing out on.

    Overall though I think the IRA is supposed to be better. Especially for me as a younger person who's never been at a job longer than 3 years, it's easy to just roll everything into that, rather than managing several different 401ks.

    You could always go with someone like Vanguard that doesn't charge you account service fees. Plus, I like their index funds. Can't beat the expense ratios and most people are better off in a broad market fund instead of individual stocks anyway.
  • mwcontois
    mwcontois Posts: 44 Member
    I rolled my old 401k into an IRA. One unforeseen bad side is that my 401k was a free account with no fees associated, but my IRA charges a quarterly account maintenance fee. It's still only like $35/year, but that's $35 of interest that I'm missing out on.

    Overall though I think the IRA is supposed to be better. Especially for me as a younger person who's never been at a job longer than 3 years, it's easy to just roll everything into that, rather than managing several different 401ks.

    You could always go with someone like Vanguard that doesn't charge you account service fees. Plus, I like their index funds. Can't beat the expense ratios and most people are better off in a broad market fund instead of individual stocks anyway.

    This is correct. I have had a 401k for years and most options have fees associated with them. Even some of my index funds have fees associated, but they are always less than other types of stocks/funds. I have never heard of a free 401k. You know Wall Street wouldn't let that happen. I would roll into an IRA and select index funds or Vanguard as mentioned above to reduce the amount you pay for investment services. The biggest difference between IRA and 401k is that you pay taxes on IRA earnings now instead of at cash-out, whereas 401k earnings are tax exempt until you start withdrawing those investments. My biggest fear, with 401k, is that the govt in 2030 when social security is going bust will increase the tax rate on 401k withdrawals to something that makes the tax savings now a joke.
  • sofaking6
    sofaking6 Posts: 4,589 Member
    If the new 401k has options that you like, then to me it's almost 50/50 between that and the IRA. Just don't leave it - I recently had to roll all of my old 401ks together and it was such a PITA!!!
  • wheird
    wheird Posts: 7,963 Member
    I rolled my old 401k into an IRA. One unforeseen bad side is that my 401k was a free account with no fees associated, but my IRA charges a quarterly account maintenance fee. It's still only like $35/year, but that's $35 of interest that I'm missing out on.

    Overall though I think the IRA is supposed to be better. Especially for me as a younger person who's never been at a job longer than 3 years, it's easy to just roll everything into that, rather than managing several different 401ks.

    You could always go with someone like Vanguard that doesn't charge you account service fees. Plus, I like their index funds. Can't beat the expense ratios and most people are better off in a broad market fund instead of individual stocks anyway.

    Yup. Individual stocks can be very volatile and isn't really conducive for retirement planning because of the huge risk involved. I prefer mutual funds myself and invest fairly aggressively with them since I'm young enough to where it isn't as huge a concern.
  • HeidiCooksSupper
    HeidiCooksSupper Posts: 3,831 Member
    Find yourself a good company to deal with like Vanguard or Fidelity or the like. You can get great advice from them as they help you manage your money for retirement. You may pay a small annual fee but it's definitely worth it. Check with your new employer to see if they are using a specific one for current employees and, if you like which company they've chosen, go with that because sometimes their contract with that company will include free financial counseling for employees who participate. That's how we ended up with Fidelity (hubby's company used them) and TIAA-CREF (I worked for universities), and my sister ended up with Vanguard. Now that we are retired we do pay Fidelity a small annual fee but advice from TIAA is free for me forever because of what my universities negotiated.
  • lizzybathory
    lizzybathory Posts: 229
    I rolled my old 401k into an IRA. One unforeseen bad side is that my 401k was a free account with no fees associated, but my IRA charges a quarterly account maintenance fee. It's still only like $35/year, but that's $35 of interest that I'm missing out on.

    Overall though I think the IRA is supposed to be better. Especially for me as a younger person who's never been at a job longer than 3 years, it's easy to just roll everything into that, rather than managing several different 401ks.

    You could always go with someone like Vanguard that doesn't charge you account service fees. Plus, I like their index funds. Can't beat the expense ratios and most people are better off in a broad market fund instead of individual stocks anyway.
    Yeah, I probably should have done more shopping around when I first started the IRA. I'll look into that one; thanks!

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