401k rollover funds

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Topic Author
Oilcans
Posts: 48
Joined: Tue Mar 27, 2018 12:50 pm

401k rollover funds

Post by Oilcans »

My son left his employment and has $50,000 in his 401k. He also has $150,000 in Ally savings account. The TRowe Price funds in his 401k seem to be good funds but he wants to rollover the $50K into an IRA at Fidelity. He wants to put $25,500 into ITOT, $4,500 into IXUS international, $20,000 into FTHRX (active managed bond fund). For the remaining balance, $20,000 to non IRA to FTHRX, $76,500 to ITOT, $13,500 to IXUS, and $40,000 staying with Ally.

Questions: Instead of using ITOT and IXUS for both IRA and non IRA should he maybe use different funds outside the IRA for diversification purposes or does it make sense to use them for both IRA and non IRA's?

Also I am not sure FTHRX is the best bond fund. Any suggestions?

Thanks for any advise.
magicrat
Posts: 1109
Joined: Sat Nov 29, 2014 7:04 pm

Re: 401k rollover funds

Post by magicrat »

Oilcans wrote: Thu Nov 01, 2018 11:47 am My son left his employment and has $50,000 in his 401k. He also has $150,000 in Ally savings account. The TRowe Price funds in his 401k seem to be good funds but he wants to rollover the $50K into an IRA at Fidelity. He wants to put $25,500 into ITOT, $4,500 into IXUS international, $20,000 into FTHRX (active managed bond fund). For the remaining balance, $20,000 to non IRA to FTHRX, $76,500 to ITOT, $13,500 to IXUS, and $40,000 staying with Ally.

Questions: Instead of using ITOT and IXUS for both IRA and non IRA should he maybe use different funds outside the IRA for diversification purposes or does it make sense to use them for both IRA and non IRA's?

Also I am not sure FTHRX is the best bond fund. Any suggestions?

Thanks for any advise.
I don't know what all of those tickers are, so it's hard to offer specific advice on the funds. However, my real advice is to stay out of it. Adults should be managing their own finances. Perhaps send him a link to this forum so he can ask questions here if that's what he wants.
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Duckie
Posts: 7940
Joined: Thu Mar 08, 2007 2:55 pm

Re: 401k rollover funds

Post by Duckie »

Oilcans wrote:My son left his employment and has $50,000 in his 401k. He also has $150,000 in Ally savings account. The TRowe Price funds in his 401k seem to be good funds but he wants to rollover the $50K into an IRA at Fidelity.
If he is anywhere near the income limits for direct Roth IRA contributions, he should reconsider rolling the 401k assets into an IRA. Will he soon have another job with a retirement plan?
He wants to put $25,500 into ITOT, $4,500 into IXUS international, $20,000 into FTHRX (active managed bond fund). For the remaining balance, $20,000 to non IRA to FTHRX, $76,500 to ITOT, $13,500 to IXUS, and $40,000 staying with Ally.
He should have all the $40K bond AA in a tax-sheltered account and not split it with taxable.
Instead of using ITOT and IXUS for both IRA and non IRA should he maybe use different funds outside the IRA for diversification purposes or does it make sense to use them for both IRA and non IRA's?
If he is going to do any Tax loss harvesting he should not have the same funds in both accounts. Similar is allowed, same is not.
Also I am not sure FTHRX is the best bond fund. Any suggestions?
(FXNAX) Fidelity U.S. Bond Index Fund (0.025%) is a better bond fund and 0.025% is a lot cheaper than 0.45%.
Topic Author
Oilcans
Posts: 48
Joined: Tue Mar 27, 2018 12:50 pm

Re: 401k rollover funds

Post by Oilcans »

Duckie,

No he's not near income limits for direct Roth and he probably won't be going back to work for a couple of years. All your other answers I totally agree with that I overlooked. We will also look into FXNAX.

Thanks for your input. Your answer was exactly what I was looking for!
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