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Question for folks like me with little background on 401K, Roth IRA, etc.
My spouse will be switching employers. Her current 401k is with Vanguard (via her still current employer), the future employer (we are told) utilises Fidelity. She does not have much - probably less than 10K with Vanguard right now.
What are the recommendations, and best options going forward?
- keep the 401k with employer A as is
- move over 401k from Vanguard to Fidelity - if so, how to even start this (?), will there be any fees involved?
- move / create IRA/ Roth IRA - I know the terms, but don't have much knowledge on this, anyone who can shed some light on this will help us.
[Edit to add] Also, are there any external fees in any of the above? We are in our early/mid 30s.
What are the recommendations, and best options going forward?
- keep the 401k with employer A as is
Possibly, if you like the funds you have and they are low cost, with no additional 401k administrative fees tacked on.
Quote:
Originally Posted by kach1947
- move over 401k from Vanguard to Fidelity - if so, how to even start this (?), will there be any fees involved?
You talk to the new employer and ask them. Some plans accept rollovers from other plans and others don't.
Quote:
Originally Posted by kach1947
- move / create IRA/ Roth IRA - I know the terms, but don't have much knowledge on this, anyone who can shed some light on this will help us.
This is easy and is probably your best option, IMO. If you have the money in a Vanguard fund, all you have to do is call Vanguard and ask to do a rollover. It shouldn't be that hard. The key is you need to know all of your login passwords so they can do it for you over the phone.
Quote:
Originally Posted by kach1947
Also, are there any external fees in any of the above? We are in our early/mid 30s.
Some employer plans allow you to roll over another 401k into theirs. Some do not.
If your new employer doesn't allow that, or you don't like the new fund choices, you can have fidelity create a rollover IRA and the previous employer 401k funds would go into that. You can buy any fund using the IRA.
Alternatively if you contributed to a Roth 401k the money would roll into the Roth IRA.
My wife has a small Vanguard ROTH 401k she had from a former employer. Does is make sense for us to just roll that into a ROTH IRA with Vanguard? She has a SEP IRA with USAA as well which is what she's using now that's she's self-employed. Any way to combine things without tax implications or do we just roll the ROTH 401k and keep them separate? Balance in 401k isn't even $9k and SEP is under $6k - seems like a waste to manage multiple accounts with that low of a balance.
My wife has a small Vanguard ROTH 401k she had from a former employer. Does is make sense for us to just roll that into a ROTH IRA with Vanguard? She has a SEP IRA with USAA as well which is what she's using now that's she's self-employed. Any way to combine things without tax implications or do we just roll the ROTH 401k and keep them separate? Balance in 401k isn't even $9k and SEP is under $6k - seems like a waste to manage multiple accounts with that low of a balance.
I have the same basic question. I have 401(k), IRA, and a Roth 401(k) scattered all over the place and need to consolidate. I'm 60 and quickly approaching the point where I'm going to be taking distributions. I'm not interested in getting crushed with loads/sales fees and account service fees. I have an inherent distrust of retail finance. It's tough to get full information from web sites.
I have the same basic question. I have 401(k), IRA, and a Roth 401(k) scattered all over the place and need to consolidate. I'm 60 and quickly approaching the point where I'm going to be taking distributions. I'm not interested in getting crushed with loads/sales fees and account service fees. I have an inherent distrust of retail finance. It's tough to get full information from web sites.
I think companies like Vanguard, T. Rowe Price, Fidelity, and Dodge & Cox are all quite straightforward and don't charge loads or other annoying fees (or at least very minimal).
I think companies like Vanguard, T. Rowe Price, Fidelity, and Dodge & Cox are all quite straightforward and don't charge loads or other annoying fees (or at least very minimal).
Even though the other companeis might not have loads, I believe only Vanguard has low expense ratio stock index funds, but I have no personal experience with the other companies to know if that's a true statement. By far the best thing you can do is go with low cost stock index funds like Vanguard.
Even though the other companeis might not have loads, I believe only Vanguard has low expense ratio stock index funds, but I have no personal experience with the other companies to know if that's a true statement. By far the best thing you can do is go with low cost stock index funds like Vanguard.
No, not true. Fidelity's index funds are as cheap as Vanguard's.
T. Rowe Price has a few index funds that are admittedly overpriced. Dodge & Cox doesn't do index funds, because the only offer 6 funds, but they pretty much have the cheapest expense ratios after Vanguard...something like .52% for their stock fund, .63% for international/global funds, and .43 & .45% respectively for their bond fund and global bond funds.
All 3 companies have good actively managed funds which typically have below average expense ratios with Dodge & Cox being the cheapest. I know many index fund die hards think index funds are the only way to go. But it turns out most people are actually pretty good at picking low cost actively managed funds. Most of the assets flow to the better performing, lower cost actively managed funds, so the difference between index funds and actively managed funds isn't as large as people think, especially when measured on an asset weighted basis.
The area where people mess up most often is switching too much from one fund to another. That almost always leads to underperformance and is a problem with both index and actively managed funds.
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