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I've just been laid off and, although I have a little bit of time to make the decision, I don't want to put this off. What to do with my 401(k)?
My 401(k) is fairly large, though not as large as I thought it would be at this point in my life (just under 2 hundred thousand). I'm 45 years old. When I first started out at age 29, I chose the least risky mutual funds that were available.
I'm much more high risk right now in my choices of mutual funds. I still like to choose a mutual fund and keep it. My company has chosen mutual funds and then gotten rid of them, forcing those of us invested in it to sell. My current 401(k) only has about 21 investment choices, and I don't really like all the choices. In fact, I'm invested in 7 of the 8 funds that I like.
I don't trust the financial solvency of the company I worked for and my old coworkers don't either. However, they recently moved the handling of all paperwork to the large investment company.
I'd like to have more choices of mutual funds, probably move it to T.Rowe Price or Vangard. I don't think I want to invest in individual stocks.
Am I better off keeping it with the company's choice...do they pay for the management fees or am I currently paying management fees and just not seeing it?
You're usually better off rolling it into an IRA. Reasons are you (usually) have far more investment options and you have more control. So where to open your IRA? Either with a discount broker such as Scottrade (no annual fees), TDAmeritrade, etc., or, if you think you'll be investing in, say, Vanguard funds, you could open your IRA with them and avoid fund transaction fees. But yeah, I'd roll it.
Roll it and make sure you do not get a check yourself..have a direct transfer of money.
Got with a bigger firm..Vanguard or Fidelity for peace of mind and a good choice of investments.
My wife and I have had numerous 401s and all were rolled over to Fidelity except one that included a fund that would not be available to the IRA... and it will get rolled over eventually.
Thanks for the replies. What are Fidelity's expenses like?
The company 401(k) is managed through Fidelity, and I like them, but if I'm on my own I'll be concerned about expense ratios and management fees. Hence my thinking about Vanguard.
When my company first started the 401(k), we only had 3 choices, Fidelity Retirement Moneymarket, Fidelity Puritan and Fidelity Magellan, then they added Fidelity Asset Manager. I was forced to sell my shares of Asset Manager when they dumped it and then a few years ago it was Magellan. I just hate someone else telling me to sell.
I was with my company for 20.5 years...so I tend to like to stick to things once I invest in it.
Anyway, they now offer other company funds besides Fidelity Funds. They just don't have a good track record of keeping the same funds around.
The company 401(k) is managed through Fidelity, and I like them, but if I'm on my own I'll be concerned about expense ratios and management fees. Hence my thinking about Vanguard.
Vanguard's cheap, that's for sure. Just a FYI, you are paying fund management fees (which are part of the expense ratio) while investing through your 401k too. Every mutual fund has them, regardless of how they're acquired, and they can't be avoided...only minimized.
Definitely roll it. I'd go with Fidelity or T. Rowe Price. Lots of offerings, low fees. Get the forms into the old company ASAP. BTW, $200K at your young age, may not be where you'd like to be, but you're way ahead of your cohort!
Location: When the people find that they can vote themselves money, that will herald the end of the republic
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If you are not happy with current selections in your Fidelity 401(k) rollover into Vanguard and use only indexed Funds. The fees are very low and perfomance is connected to indexes and you will be winner in the long run.
Good luck
I'd like to have more choices of mutual funds, probably move it to T.Rowe Price or Vangard.
You have answered your own question wisely.Those two companies offer a huge variety of no-load mutual fund choices, and both companies offer seriously capable, sound fund management -- as you undoubtedly know since you chose them.
Your 401k itself is not currently charging you management fees since that would be illegal. The mutual funds in which the 401k is invested being no-load funds or load funds is the only determination of fees.
Instead of asking anonymous strangers about a company's fees, Google the company, go to their website, look up the actual information or call their 800 number and get the actual information. Sounds like a plan, eh?
Make sure when you ask for the account to be liquidated the check is made to the new fund...believe that's how it works
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T. Rowe and Vangard are excellent choices
