Help with decision on Fidelity 401k

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Aprl
Posts: 11
Joined: Tue May 12, 2015 12:21 pm

Help with decision on Fidelity 401k

Post by Aprl »

Hi Bogleheads, I would appreciate your advice on the following. I am retired, not withdrawing RMD for a few years.I have a 401K with Fidelity (about 350k). I also have a 3fund IRA portfolio with Vanguard. I wanted to rollover the 401K to vanguard but my plan with Fidelity does not allow electronic transfers of 401K to another company. They will send me a check made out to the company which I know is common practice but I Really do not want a check with that amount sent to me in the mail. I am scared of it being lost. My alternative is to keep the money in the 401K (which is allowed) or roll it over to Fidelity IRA 3 fund portfolio( FSTVX, FTIPX, FSITX, or similar fund) and after awhile do an electronic transfer to Vanguard. Fidelity does electronic transfers of IRA but not 401K. If I keep it in the 401k I would do a rebalancing . I am just not sure how good these funds are. These are the funds with the percentages that I currently have with the exp ratios.in the 401k.

32.36% MIP 11 CL 3 ( ER. 0.32%)
14.30% F.R FIXED INCOME (ER. 0.00%)
11.85% Vang Primecap ADM (ER 0.41%)
11.29% FID Custom Contra (ER 0.41%)
11.26% BTC US Equity MKT (ER 0.01%)
10.42% FID Custom LP STK (ER 0.49%)
4.41% CAP Group INTL EQ. (0.00%)
4.115 TMPL INTL FRGN A3 (ER 0.00%)

Other funds offered in the plan
Russell Small Cap (ER 0.00%)
Russell Real Assets (0.03%)

Thanks for your advice.
User avatar
ruralavalon
Posts: 26351
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: Help with decision on Fidelity 401k

Post by ruralavalon »

That seems odd to me.

I don't know, but if you exchange everything in the Fidelity 401k into a money market fund will Fidelity do a "trustee to trustee" rollover of the cash to Vanguard?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Whakamole
Posts: 1765
Joined: Wed Jan 13, 2016 8:59 pm

Re: Help with decision on Fidelity 401k

Post by Whakamole »

When I've rolled money over this way and needed to take a check, the check was not made out to me personally, but (in the case of transferring to Vanguard) to "VFTC fbo Whakamole" (VFTC = Vanguard Fiduciary Trust Company.) I could not cash the check even if I wanted to.

I did this a number of times last year for the after tax 401k->Roth IRA trick and never had an issue.
User avatar
jhfenton
Posts: 4754
Joined: Sat Feb 07, 2015 10:17 am
Location: Ohio

Re: Help with decision on Fidelity 401k

Post by jhfenton »

It is not unusual. A lot of 401(k) plans will not do electronic rollovers. And in those cases, it's not unusual for the one exception to be themselves. (Surprise!)

I would definitely do an electronic rollover to a Fidelity IRA and then get myself back in the market using ETFs, decide whether (1) you want to pay a commission at Fidelity to buy Vanguard ETFs, (2) you want to pay a commission at Vanguard to sell Fidelity/iShares ETFs, or (3) you are happy holding Fidelity/iShares ETFs at Vanguard and never paying a commission. Then I'd do an in-kind trustee-to-trustee IRA transfer of those assets to Vanguard. That should minimize your time out of the market to a day or two.

I expect, if and when I someday leave my current job, to have to do the same thing with my Fidelity-sponsored 401(k).
User avatar
jhfenton
Posts: 4754
Joined: Sat Feb 07, 2015 10:17 am
Location: Ohio

Re: Help with decision on Fidelity 401k

Post by jhfenton »

Whakamole wrote:When I've rolled money over this way and needed to take a check, the check was not made out to me personally, but (in the case of transferring to Vanguard) to "VFTC fbo Whakamole" (VFTC = Vanguard Fiduciary Trust Company.) I could not cash the check even if I wanted to.

I did this a number of times last year for the after tax 401k->Roth IRA trick and never had an issue.
That's typical, but it means a lot of time out of the market for $350,000.

I helped my wife with two 401(k) rollovers in the last two years. The first, large rollover was ACH'd from Schwab straight to TD Ameritrade. Two days out of the market in total. (Kudos to Schwab and TD Ameritrade for making it easy.) The second, tiny ($3,000) rollover was sent by check straight to Vanguard. I merely moved $3,000 from fixed income to equities for the week and a half the check was in the mail.
Jack FFR1846
Posts: 18499
Joined: Tue Dec 31, 2013 6:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Help with decision on Fidelity 401k

Post by Jack FFR1846 »

Why not roll over to a Fidelity IRA? I don't know, but worth checking if Fidelity will give you a bonus for this rollover. Either way, Fidelity has great low cost index funds.

If you want to play the rollover game, you could instead rollover to Schwab and for sure get a bonus for doing so. They have great ETFs. TDAmeritrade, same story as Schwab. After XX amount of time, if you wanted, roll to the next one.
Bogle: Smart Beta is stupid
quaternion
Posts: 44
Joined: Mon Apr 25, 2016 5:09 am

Re: Help with decision on Fidelity 401k

Post by quaternion »

Some 401ks (the good ones) give you access to institutional share classes that have lower expenses that what you can get in an IRA. From your fund list, it looks like this may be the case in yours, though I can't quite decode the abbreviated names. If so, then it may be best to leave the money in the 401k rather than doing a rollover.

Fidelity 401Ks sometimes allow you to open a brokerage account inside the 401K (called "BrokerageLink"). If there are any gaps in the 401K funds, you might be able to fill them in this way via Fidelity's index funds and ishares ETFs.
Topic Author
Aprl
Posts: 11
Joined: Tue May 12, 2015 12:21 pm

Re: Help with decision on Fidelity 401k

Post by Aprl »

The funds are:
I could only find a ticker for the Vanguard fund

Fidelity managed income portfolio II class 3
Fidelity Fixed income I fund
Vanguard Pfimecap fund admiral shares VPMAX
Fidelity custom contrafund portfolio
Blackrock US Market Fund
Fidelity Custom Low-Priced Stock Portfolio Trust (US) Fidelity
Capital Group International Equity Trust (US) Fidelity Investments
Templeton International Equity Fund - A3 Investments
rotorhead
Posts: 576
Joined: Wed Mar 17, 2010 3:59 pm
Location: Florida

Re: Help with decision on Fidelity 401k

Post by rotorhead »

Apri, my corporate 401k was with Fidelity also. A few years after retirement, when management of the 401k was being moved to a different company, I decided to make the break; and rolled it over to Fidelity. Only took a few keystrokes; and was absolutely painless. I now have 2 funds, one equity and one bond. Couldn't be more pleased.

My wife's 401k was rolled to Vanguard in similar fashion after she stopped working. Painless exercise; and she has 2 funds also, one stock and one bond. Very pleased with the arrangement.

One day, eventually, we will consolidate into either Fidelity or Vanguard for further simplicity. Right now we're content to leave good enough alone. ER's for both are almost identical.
User avatar
retiredjg
Posts: 54082
Joined: Thu Jan 10, 2008 11:56 am

Re: Help with decision on Fidelity 401k

Post by retiredjg »

The best thing to do is just go ahead with the check. If it gets lost, they will stop payment and send you another check. We hear of this all the time (the checks, not getting lost) and it appears to go very smoothly.

However, fear is not rational. If you can't do it, the next best choice is to roll it to a Fidelity 401k and use the Fidelity Index funds https://www.fidelity.com/mutual-funds/f ... ndex-funds which are pretty much as good as the Vanguard funds. If you decide later to transfer the money to Vanguard, you can do a trustee to trustee transfer at that time.
Topic Author
Aprl
Posts: 11
Joined: Tue May 12, 2015 12:21 pm

Re: Help with decision on Fidelity 401k

Post by Aprl »

Thank you all so much for your advice.
It has helped me with my decision, I was getting stressed out over this.
Post Reply