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Old 01-31-2017, 07:20 PM
 
Location: Seattle
7,507 posts, read 17,133,490 times
Reputation: 4783

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I will be leaving my current job and am considering what to do with my defined contribution retirement plan. A couple caveats: I understand that this forum doesn't replace advice from a financial advisor, and I also understand all the general warnings re: before tax contributions, etc.

Anyone have some general ideas or advice on what's best to do? I generally would roll these funds into my next employer's plan, if possible, but at this point I don't have an employer lined up and may be looking at taking a few months off this summer. I could leave the funds where they are (with a 16-17% return over the past couple years, I feel pretty comfortable doing that) or I could roll them forward into my own traditional IRA.

Any other ideas or suggestions from folks who've been in a similar spot? Thanks!
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Old 01-31-2017, 07:32 PM
 
30,873 posts, read 36,800,350 times
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It really depends on the funds you have in your existing plan and whether they're good funds or not. If they're good funds that are not easily accessed outside your plan, then it wouldn't be a bad idea to just leave the money in the plan.


The problem is, a lot of people don't really know whether they have good funds or not....so your first order of business is to find out.
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Old 01-31-2017, 08:11 PM
 
Location: Berkeley Neighborhood, Denver, CO USA
17,681 posts, read 29,625,505 times
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Do not leave your money in an ex-employer 401k.
Roll all into your IRA.
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Old 01-31-2017, 09:28 PM
 
Location: Seattle
7,507 posts, read 17,133,490 times
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Thanks for the responses so far. Just to clarify, this is a SEP/Simplified Employment Pension Plan through the State of Alaska, so I am not worried so much about letting it hang out, for example, for a few months while I figure out my next employment status.

I'd say the funds in the existing plan are good. 2016 averaged a 17% return. 2015 averaged 16%. I'm not a financial wizard by any means, but that seems to pass my sniff test.
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Old 02-01-2017, 09:18 AM
 
Location: Capital Region, NY
2,446 posts, read 1,502,407 times
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I would wait until you have a new employer, if you expect that to happen within a year or so. Then I would look to see if the new employer offers Vanguard, Fidelity, or other low cost index funds in their plan before transferring. I thought SEP's were for self-employed folks?
DC
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Old 02-01-2017, 09:53 AM
 
Location: Portal to the Pacific
8,736 posts, read 8,626,544 times
Reputation: 13006
Quote:
Originally Posted by jabogitlu View Post
I will be leaving my current job and am considering what to do with my defined contribution retirement plan. A couple caveats: I understand that this forum doesn't replace advice from a financial advisor, and I also understand all the general warnings re: before tax contributions, etc.

Anyone have some general ideas or advice on what's best to do? I generally would roll these funds into my next employer's plan, if possible, but at this point I don't have an employer lined up and may be looking at taking a few months off this summer. I could leave the funds where they are (with a 16-17% return over the past couple years, I feel pretty comfortable doing that) or I could roll them forward into my own traditional IRA.

Any other ideas or suggestions from folks who've been in a similar spot? Thanks!
That's a good rate of return and I would probably let them sit pretty until you have another 401k option and then compare the fund offerings.

We have 2 old 401ks and just yesterday we rolled an old Fidelity with the bulk of our retirement savings into a current Vanguard one. We are hoping to roll the other one soon too.

We backdoor contribute to a roth IRA and so we avoid IRA rollovers. I was very glad to hear that we could do a 401k to 401k rollover with the Vanguard account because you don't always have that option or sometimes the new plan's offerings are poor. Anyway, if you think you might be like us it's something to consider too.
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