Rollover 401k to 403b?

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Joined: Fri Aug 10, 2018 10:09 am

Rollover 401k to 403b?

Post by Uber » Fri Aug 10, 2018 10:15 am

Hello all.

I am currently working at a new job that offers 403b through Omni. I picked Aspire as the provider since they had low fees and Vanguard.
Aspire has Vanguard Total Stock investor and admiral which I invested most into. I'm currently an investor. My job does not offer Roth. Annual salary is 50k.

On my 401k, though Charles Schwab (401k and roth), I invested in Vanguard 500 index admiral (I have over 10k invested) with some other investments.

What should I do with my 401k? Someone said not to roll it in to my 403b due to limited investments and high fees?

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Joined: Sat Jan 20, 2018 4:02 pm

Re: Rollover 401k to 403b?

Post by ExitStageLeft » Fri Aug 10, 2018 3:48 pm

Welcome to the forum! You have a few options with the 401k from your old employer, but bear in mind that there is no urgency. You can take your time to learn as much as possible, then decide when you figure which option is most advantageous.

Your options are:
1) Do nothing. The account stays where it is. You will not be able to add any funds, but you should be able to exchange from one fund to another at any time. There may an extra fee for an inactive account.

2) Roll it into your 403b account. This assumes it is allowed in the 403b plan. It most likely is allowed, but you should confirm with the new 403b provider or your HR office.

3) Roll it into a traditional Individual Retirement Account (tIRA). Doing this would keep the money tax-deferred, but it changes its legal status from being part of an employer's retirement plan to being your personal retirement asset.

Options 1 and 2 keep things under the protection of the Employee Retirement Income Security Act (ERISA). Option 3 removes that protection, although in most states an IRA has the same level of protection as a company retirement plan. Your state and your level of worry about asset protection will determine if you should be concerned about losing ERISA protection.

Option 3 would give you greater flexibility and options, and assuming you go with low-cost index funds will likely charge you the lowest fees.

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