Seeking 401k rollover advice

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5head
Posts: 8
Joined: Fri Jun 16, 2017 10:49 am

Seeking 401k rollover advice

Post by 5head » Mon Jun 19, 2017 9:35 am

Subject: Seeking 401k rollover advice

Hello –

I am seeking 401k rollover advice from previous employer 401k to new employer 401k.
New employer contributes 50% up to 8%.

Portfolio breakdown –

Old Employer (percent, fund name, ticker symbol, expense ratio) –

32.91%, Fidelity 500 Index Fund - Institutional Class, (FXSIX) (0.035%)
29.49%, Fidelity Extended Market Index Fund, (FSEVX), (0.07%) – (Same as new employer)
24.50%, Fidelity International Index Fund, (FSIVX), (0.08%) – (Same as new employer)
13.10%, Fidelity U.S. Bond Index Fund, (FXSTX), (0.04%)

New Employer (percent, fund name, ticker symbol, expense ratio) –

40.07%, Fidelity 500 Index Fund, (FUSVX), (0.045%)
20.33% Fidelity International Index Fund, (FSIVX), (0.08%) – (Same as old employer)
19.54%, Fidelity Inflation-Protected Bond Index Fund, (FSIYX), (0.09%)
10.02%, Fidelity Extended Market Index Fund, (FSEVX), (0.07%) - (Same as old employer)
10.02%, Fidelity Small Cap Index Fund, (FSSVX), (0.07%)

Question #1: Should I rollover my funds from previous employer to new employer or keep them or something else?

Thanks!
5head

deltaneutral83
Posts: 305
Joined: Tue Mar 07, 2017 4:25 pm

Re: Seeking 401k rollover advice

Post by deltaneutral83 » Mon Jun 19, 2017 10:51 am

People are going to chime in but you will want to roll it over to something self directed. Depending on tax bracket, rolling it to a Roth and taking the tax hit if you have the cash may be an option. Another option is to roll it over to a trad IRA. Rolling it to your new employers 401k for your specific situation doesn't appear to be too bad based on expense ratios and it will give you the consolidation and simplicity I take it you are aiming to achieve. But the total control of a self directed Trad/Roth is what I would be doing because the options you have in your new 401k might not be so good down the road.

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ruralavalon
Posts: 10923
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Seeking 401k rollover advice

Post by ruralavalon » Mon Jun 19, 2017 11:16 am

Welcome to the forum :) .

That's a nice employer match, you are fortunate.

5head wrote:Subject: Seeking 401k rollover advice

Hello –

I am seeking 401k rollover advice from previous employer 401k to new employer 401k.
New employer contributes 50% up to 8%.

Portfolio breakdown –

Old Employer (percent, fund name, ticker symbol, expense ratio) –

32.91%, Fidelity 500 Index Fund - Institutional Class, (FXSIX) (0.035%)
29.49%, Fidelity Extended Market Index Fund, (FSEVX), (0.07%) – (Same as new employer)
24.50%, Fidelity International Index Fund, (FSIVX), (0.08%) – (Same as new employer)
13.10%, Fidelity U.S. Bond Index Fund, (FXSTX), (0.04%)

New Employer (percent, fund name, ticker symbol, expense ratio) –

40.07%, Fidelity 500 Index Fund, (FUSVX), (0.045%)
20.33% Fidelity International Index Fund, (FSIVX), (0.08%) – (Same as old employer)
19.54%, Fidelity Inflation-Protected Bond Index Fund, (FSIYX), (0.09%)
10.02%, Fidelity Extended Market Index Fund, (FSEVX), (0.07%) - (Same as old employer)
10.02%, Fidelity Small Cap Index Fund, (FSSVX), (0.07%)

Question #1: Should I rollover my funds from previous employer to new employer or keep them or something else?

Thanks!
5head

I think a rollover from the old 401k to the new 401k is probably a good idea. The new 401k seems to offer broadly diversified low expense ratio index funds. That rollover will give you one less account to keep track of and manage.

In your new 401k I suggest continuing to use Fidelity U.S. Bond Index Fund if offered, rather than the TIPS fund unless you are very close to retirement. Unless very close to retirement your inflation protection is your earning capacity and your relatively high stock allocation.

Do you have other accounts in addition to these 401ks? If so what are the other accounts invested in? You can simply add this to your original post using the edit button, so that all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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patrick013
Posts: 1633
Joined: Mon Jul 13, 2015 7:49 pm

Re: Seeking 401k rollover advice

Post by patrick013 » Mon Jun 19, 2017 12:17 pm

What are your tax rates present and future ? A 401k-Roth might
be a good idea for future contributions.
age in bonds, buy-and-hold, 10 year business cycle

pingo
Posts: 2570
Joined: Sat Sep 19, 2009 8:24 pm

Re: Seeking 401k rollover advice

Post by pingo » Mon Jun 19, 2017 12:39 pm

Rolling to the new 401k is fine. If you provide the information the others are requesting (best if it's all the recommended information (link), we can help you know what advantage, if any, may be in one choice over the other. Please add that information into your initial post in this thread.

I agree with staying with the Fidelity U.S. Bond Index fund, rather than TIPS.

I also notice that in the old 401k you're 50:50 US Large/US Ext Mkt. In the proposed changes, you're 2/3 US Large, 1/3 US Small and Ext Mkt. Most people would probably agree that the 2nd is preferable, risk-wise, it is also more complex to use the Ext Mkt fund and the Small Cap fund. I think most would simply pick one, but I'd like to know your reasons for doing the change and for that particular arrangement?

crit
Posts: 331
Joined: Mon Jan 05, 2015 12:54 pm

Re: Seeking 401k rollover advice

Post by crit » Mon Jun 19, 2017 12:42 pm

Yes, your new 401k looks to be a very good choice with low-cost options, and rolling it into the new 401k (as opposed to a rollover IRA) leaves the backdoor Roth as an option for you.

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