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Old 02-09-2017, 09:16 AM
 
Location: RVA
2,172 posts, read 1,270,926 times
Reputation: 4492

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Ive done five rollers, one each year mostly on after tax 401k contribution to a Roth for the last five while working. No fees associated at either end. The receiver (Fidelity for me, too) wants your money in their accounts, so no fee, and the admin fees that are built in to the 401k cover things like transfers as well.

There are no fees for buying or selling company stock or any funds in the 401k, again, covered by the same admin fees, since they do a bulk combined transaction on relatively few funds once each day, total distributed cost is negligible.

Within Fidelity, and any other brokerage house, there is always a fee for each buy and sell, which is flat. So if I buy and sell $100k worth of stock or funds, the buy followed by the sell cost me $16 at fidelity. Very low percentage. If I buy $100 & sell $100, same $16, VERY high percentage. So the base fee can be lower as a percentage, but added fees can bring it up. The better the customer (ie, the more you have with them), the lower the cost as a percentage.

I'm quite sure Any large house does the same thing, combine bulk buys and sells, to minimize costs, and then divde appropriately after the amounts settle. I often see in my Fidelity transactions a "value added" savings that can often eliminate the transaction fee completely. They do it cheaper than I can on my own because of sheer volume.
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Old 02-09-2017, 09:22 AM
 
71,769 posts, read 71,875,234 times
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i use quite a few of the no commission etf's at fidelity . they have some i-shares and their own that are commission free . specifically i use TLT ,SHY AND IVV

if you are rolling money in to fidelity check the promo's . they offer you cash for moving money .
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Old 02-09-2017, 09:25 AM
 
Location: Central Massachusetts
4,800 posts, read 4,855,118 times
Reputation: 6379
Okay you are all right. None of the aforementioned companies charges a dime on managing, manipulating, earning you money. The all do it out of the kindness of their hearts. They do business in their home garage offices to save you all money.
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Old 02-09-2017, 09:29 AM
 
71,769 posts, read 71,875,234 times
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how they make their money is very different from fees for transferring money in or out . fidelity pays you to move money there .

i had david lerner charge me 35 bucks to move out an ira to fidelity .

but most major company's usually have no account transfer fee's . they make their billions in other ways .
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Old 02-09-2017, 09:55 AM
 
71,769 posts, read 71,875,234 times
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keep in mind many fund family's offer the same funds as the regular versions to 401k plans and they have different symbols and a higher expense ratio . .

i had a few fidelity funds both in my 401k and my ira . the funds are the same but the 401k versions have higher expense ratio's .

those higher expense ratio's are what covers the extra paper work involved and all the related costs of agents who sell these funds to your company . .

fidelity actually has 3 levels of many funds . they have the regular version we buy , the 401k version and for their larger institutions the institutional version .

the institutional versions are actually the cheapest but require millions .
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Old 02-09-2017, 11:52 AM
 
660 posts, read 312,437 times
Reputation: 1242
If it had, the IRS website would reflect that.
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Old 02-09-2017, 03:43 PM
 
Location: On the road
5,967 posts, read 2,905,907 times
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Quote:
Originally Posted by mathjak107 View Post
every time i left a company i rolled my 401k over to my ira pre 54-55 .
Me too.

401k -> IRA -> Roth

Obviously the last part takes a lot longer since managing income for tax and ACA purposes, and even though already started in our 40s we still won't come anywhere close to getting it all converted.
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Old 02-11-2017, 10:41 PM
 
466 posts, read 291,312 times
Reputation: 1809
OP here, and thank you for the responses. Not in a TSP. Not looking to roll to a Roth for my wife, since I am single. The 55 or greater allowance is fine, but you are required to follow RMD rules for the amount you can withdraw, which are based on longevity tables and, in my case, result in a lower amount than I want to take.


As a single person, why would I want to roll into a Roth? Does being single ever matter, or is this something I should consider for myself? If so, why?


Also, I am interested in learning more about why I should take it out of my employers plan and into an IRA as some suggested. What "problems" potentially experienced by my employer after I quit could impact my account? Planning on retiring and ending employment before I start withdrawals, so employer matches are not in play.


Thanks so much! As always, this group is a wealth of information!
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Old 02-12-2017, 02:37 AM
 
71,769 posts, read 71,875,234 times
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fees, choices , and if your company fails it can take months to get the money out once it is locked .

if the company fails to keep paying the custodial fees the state takes over the plan until a custodian can distribute the money . for months we had no access to our money .

we worked for a company that failed and while we saw the usual credit holds when money gets tight no one ever thought the company would go bust . we didn't see it coming working there , what chance would you see it not working there ?

next thing we know we get a message the 401k plan was terminated and locked .

Last edited by mathjak107; 02-12-2017 at 03:04 AM..
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Old 02-12-2017, 02:49 AM
 
Location: Central Massachusetts
4,800 posts, read 4,855,118 times
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mathjak is right. I wouldn't leave the money in the 401k. It don't honestly matter that you do not convert in the roll over. the point is rolling it out for safety from your former employer and two to lower fees. I am not a huge fan of conversions unless you have a very small amount or a very large amount. Small <= $75k Large => $900k and that large number is age dependent. The reasons are quite simple if you have time to recover from the drop from taxes then a conversion makes good sense. It also helps in keeping your taxable income lower each year. But knowing what your AGI is and how much of a difference between current level of tax to the next tax bracket can make converting profitable.
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