Roll over 401k to Vanguard or not ?

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Topic Author
tdmtdv6
Posts: 17
Joined: Wed Jan 29, 2020 2:00 pm

Roll over 401k to Vanguard or not ?

Post by tdmtdv6 » Wed Jan 29, 2020 2:59 pm

Hello all:
I m a newbie on this forum and seeking for advise.
I have a ~$850k 401k currently with Empower from my previous employer. It has annualized earning of 6.7% in the last 5 years. (Self invest)

Empower is offering to manage the account for a fee of
0.3% annually (of the total balance).

Or I can roll it over to a Vanguard IRA. And pay Vanguard to manage it.

I am looking to retire in the next 4-5 years when I am ~ 57 years old.

Any pro and con to rollover or Not?
Should I manage the investment myself and What should my investment allocation be?

Thank you in advance for your time and response.

bloom2708
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Location: Fargo, ND

Re: Roll over 401k to Vanguard or not ?

Post by bloom2708 » Wed Jan 29, 2020 5:12 pm

Can you move it into your current 401k?

Are you in a position where you do Back Door Roth contributions each year? Rolling the 401k to a Traditional/Rollover IRA would remove that as an option.

If income/back door Roth is not in play, then a Rollover IRA at Vanguard would allow you to have their low cost index funds and escape the fees. 6.7% for 2019 isn't very good (not knowing at all what is in it and the mix of stocks/bonds).
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead

lakpr
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Re: Roll over 401k to Vanguard or not ?

Post by lakpr » Wed Jan 29, 2020 5:27 pm

A 401k to 401k rollover is most often recommended. Not to an IRA.

Two main reasons, which may or may not be applicable to your particular case.

1. All 401k plans are subject to ERISA law, which, among others, have powerful anti-alienation provisions. What that lawyerly sounding sentence means is that, your creditors (who you owe money to), cannot touch the funds in the plan even through any judgments. IRAs, on the other hand, are mostly governed by state law. Some (many?) states did pass laws also protecting IRAs, but not all did. So do you want to take a chance that, in future if you move to a state that does not have as generous protections, and become liable to someone you are unable to pay --- grab your retirement funds?

There is another Federal law called BAPCAP passed in 2004 that also protects IRAs, but to my knowledge, requires you to file bankruptcy first. Which means your credit history gets trashed, you will have difficulties renting or buying a home, your insurance premiums go up, etc. 401k protections on the other hand, are completely bullet proof. No filing for bankruptcy required.

2. IF your household income exceeds $206k in 2020, and adjusted for inflation going forward, you are not allowed to contribute to Roth IRA. Either of you ... you and your spouse. But, there exists a technique called "backdoor Roth" (search the Wiki for that phrase), through which you first contribute $6000 to a non-deductible IRA, then turn around and convert it to a Roth IRA. HOWEVER, this technique works only if you have no other Traditional IRA, since IRS views any conversion to Roth from Traditional IRA, as a pro-rated conversion.

So if you have $100k in an IRA already, you contribute $6k non-deductible contributions, and convert $6k to Roth. IRS views this as $6k/$106k * $6k = $340 of non-deductible contribution converted to Roth, and $100k/$106k * 6k = $5660 of pre-tax IRA amount converted to Roth. You owe taxes on $5660 of the conversion.

If instead you did NOT move the 401k to IRA, and the prior balance in traditional IRA is zero, for the same action of $6k contribution to n-d-tIRA and $6k conversion, IRS will treat it as $6k/($6k + 0) = 100% of the conversion is non-taxable, and no additional taxes due!!

Avoid that rollover to an IRA, if you can help it. Choose to keep the funds in the old 401k, or roll it over to new 401k.

ShadesOutWest
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Re: Roll over 401k to Vanguard or not ?

Post by ShadesOutWest » Wed Jan 29, 2020 5:41 pm

If you left the company that 401K was with, you can and should move transfer the account to a Rollover IRA. I have used both TDAmeritrade and Vanguard to do this with my and my wife's 401K from past employers. The reason most people rollover the 401K to an IRA is that they get better and lower costing investment choices. Vanguard in particular is very good at this. The Vanguard Wellington fund Admiral Shares (VWENX), which is a 67/33 Stock to Bond fund has an expense ratio of only .17. A Vanguard Target [Date] Retirement fund which has an expense ratio of .14 has the following diversification in it's 2040 fund:

To rollover your 401k, simply open the new account at the new brokerage (Vanguard, Fidelity, ...), then when asked to fund it direct the incoming funds to the 401k. They all can do this online, but you will likely need to call Empower and give them the new account number for where the money is going. They will also send you a form to sign and return. I've dealt with Empower for one of our 401k's.

Best of luck going forward.

dbr
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Re: Roll over 401k to Vanguard or not ?

Post by dbr » Wed Jan 29, 2020 5:43 pm

lakpr has given you a good rundown of some of the considerations.

What you don't mention are the fund choices in the 401k. If they are lousy it might be best anyway to roll over the money. If they are good, leaving it alone makes sense. If the new 401k is good or better and they allow rollovers, which many plans do not, that could be a good choice. Is the offer to manage the money for 0.3% a rollover to an IRA? Picking off 401k rollovers is one of the more nefarious practices in the business. Even if they manage for 0.3%, what will they invest you in? If you are managing your 401k now, what do you need management for?

Elysium
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Re: Roll over 401k to Vanguard or not ?

Post by Elysium » Wed Jan 29, 2020 6:02 pm

tdmtdv6 wrote:
Wed Jan 29, 2020 2:59 pm
Hello all:
I m a newbie on this forum and seeking for advise.
I have a ~$850k 401k currently with Empower from my previous employer. It has annualized earning of 6.7% in the last 5 years. (Self invest)

Empower is offering to manage the account for a fee of
0.3% annually (of the total balance).

Or I can roll it over to a Vanguard IRA. And pay Vanguard to manage it.

I am looking to retire in the next 4-5 years when I am ~ 57 years old.

Any pro and con to rollover or Not?
Should I manage the investment myself and What should my investment allocation be?

Thank you in advance for your time and response.
What was your AA? how much in stocks vs bonds.

Depending on the answer to that, Vanguard PAS may be able to give you far better returns through better management of the portfolio. Your returns look far less than what you could have achieved even with conservative allocations for the past 5 years.

This will be the most important factor, because none of the other things are major factors. The difference is going to be in tens of thousands of dollars with that size portfolio between poor management and good management.

Surely look at state laws regarding IRA protections, many states have this already, mine does, chances are yours may too. Roth contribution eligibility matters, but again compare with thousands you are losing through poor management.

Topic Author
tdmtdv6
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Joined: Wed Jan 29, 2020 2:00 pm

Re: Roll over 401k to Vanguard or not ?

Post by tdmtdv6 » Wed Jan 29, 2020 9:26 pm

Thank you all for the responses and here are our numbers to give a better perspective. I would appreciate any comments and advises from all the wise folks on this forum:

- My spouse and I are both 52 years old
- My current Employer 401K - $150K AA 60/40
- Former Employer 401K $850K AA details below
- Spouse 401K/IRA/Roth IRA - $600K AA 65/35
- Saving/CD earning 1.5-2.3% interest - $500K (Should we put some of these in the markets now?)
- Brokerage accounts 100K, (75% sitting in cash)
- SFH rentals equity $1.7M

1. Agreed that 6.7% in the last 5 yrs is low return and probably due to my poor choice of MF picks/allocation and neglect paying attention to it in the last 10 years or so. That is the reason why I am considering letting Empower manage my 401k or roller and let Vanguard manage it. Or seeking advice to re-allocate.

2. Former employer 401k current investment allocations:
- 23% American Funds EuroPacific GR R6
- 6% Vanguard Small-cap Indes-inst Plus
- 6% Vanguard mid-cap index-inst Plus
- 24 % Vanguard Institutional 500 Index Trust
- 29% Vanguard Instl Total Bond Mrkt Idx trust
- 12% Prudential Core Plus Bond Fund Class 12

Any suggestions to re-allocate? Or Rollover to Vanguard and let them manage? (If we retire early, we probably won't need this money until we reach 59.5

3. I am unable to do back door Roth conversion in the past 5 years due to defer income payout from the previous employer. However, in 2020 my wife and my income MAGI should be right below the limit to contribute to Roth IRA. (My wife have a regular IRA, but I don't currently have a regular IRA)

4. My current employer 401K do allow rollover. They also offer both Roth and regular 401K.
However, I only contribute max and catch up to regular 401K. Should I change and contribute to both regular and Roth 401K?

Again, thank you all for your time and suggestions.

shess
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Re: Roll over 401k to Vanguard or not ?

Post by shess » Wed Jan 29, 2020 9:35 pm

tdmtdv6 wrote:
Wed Jan 29, 2020 2:59 pm
I am looking to retire in the next 4-5 years when I am ~ 57 years old.

Any pro and con to rollover or Not?
Should I manage the investment myself and What should my investment allocation be?
I'm retired early, and recently realized something I'm missing out on - the rule of 55:
https://www.thebalance.com/what-is-the- ... 55-2894280
Under this rule, you can withdraw penalty free from the 401k from the place you retire from if you retire between 55 and 59 1/2.

Note that this only applies to the 401k associated with the position you retire from! So if you retire at 57, you can't do penalty-free withdrawals from your previous-employer 401k unless you roll it into the current-employer 401k.

Topic Author
tdmtdv6
Posts: 17
Joined: Wed Jan 29, 2020 2:00 pm

Re: Roll over 401k to Vanguard or not ?

Post by tdmtdv6 » Thu Jan 30, 2020 9:37 am

Thank you Shess for the great information. I will certainly plan this in my retirement.

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ruralavalon
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Re: Roll over 401k to Vanguard or not ?

Post by ruralavalon » Thu Jan 30, 2020 3:16 pm

tdmtdv6 wrote:
Wed Jan 29, 2020 9:26 pm
Thank you all for the responses and here are our numbers to give a better perspective. I would appreciate any comments and advises from all the wise folks on this forum:

- My spouse and I are both 52 years old
- My current Employer 401K - $150K AA 60/40
- Former Employer 401K $850K AA details below
- Spouse 401K/IRA/Roth IRA - $600K AA 65/35
- Saving/CD earning 1.5-2.3% interest - $500K (Should we put some of these in the markets now?)
- Brokerage accounts 100K, (75% sitting in cash)
- SFH rentals equity $1.7M
I suggest investing some of the $500k savings and the idle $75k cash in your taxable brokerage accounts.

What is your tax bracket, both federal and state? When do the CDs mature?

In a taxable account use very tax-efficient stock index funds. Wiki article "Tax-efficient fund placement". At Vanguard I suggest using Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) ER 0.04% and Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%. Stock index funds are also well suited to any type of account.


tdmtdv6 wrote:
Wed Jan 29, 2020 9:26 pm
1. Agreed that 6.7% in the last 5 yrs is low return and probably due to my poor choice of MF picks/allocation and neglect paying attention to it in the last 10 years or so. That is the reason why I am considering letting Empower manage my 401k or roller and let Vanguard manage it. Or seeking advice to re-allocate.

2. Former employer 401k current investment allocations:
- 23% American Funds EuroPacific GR R6
- 6% Vanguard Small-cap Indes-inst Plus
- 6% Vanguard mid-cap index-inst Plus
- 24 % Vanguard Institutional 500 Index Trust
- 29% Vanguard Instl Total Bond Mrkt Idx trust
- 12% Prudential Core Plus Bond Fund Class 12

Any suggestions to re-allocate? Or Rollover to Vanguard and let them manage? (If we retire early, we probably won't need this money until we reach 59.5

What are the expense ratios as charged in your old employer's 401k plan?

What funds are offered in your new employer's 401k plan? Please give fund names, tickers and expense ratios.

It depends almost entirely on expenses and funds offered, information not provided in your post. There are three basic choices.

1) If the funds offered in the old 401k are good with low expense ratios, and there is no account maintenance fee charged for keeping the account there or only a small fee, then it may be best to leave the old 401k where it is.

2) If the new 401k offers similar or better funds with similar or lower expense ratios, and will accept a rollover from the old 401k, then it may be best to roll the old 401k over into the new 401k.

3) If neither 401k offers good funds with low expense ratios then it may be best to roll the old 401k over to an IRA at a low cost provider like Vanguard or Fidelity.

Wiki article, 401k, ”Rollover to IRA".

Additional considerations include:

1) the convenience of having one fewer account to keep track and manage, if you move the old 401k into the new plan or an IRA;

2) depending on your state, a 401k plan may have greater protection from creditors than does an IRA;

3) a rollover to an IRA may impede ability to do a Backdoor Roth IRA for higher income individuals, and

4) a 401k allows distributions penalty free starting at age 55 if no longer employed, and has other provisions for withdrawals earlier than age 59.5. Wiki article, 401k, "Move to new 401k".



tdmtdv6 wrote:
Wed Jan 29, 2020 9:26 pm
3. I am unable to do back door Roth conversion in the past 5 years due to defer income payout from the previous employer. However, in 2020 my wife and my income MAGI should be right below the limit to contribute to Roth IRA. (My wife have a regular IRA, but I don't currently have a regular IRA)

4. My current employer 401K do allow rollover. They also offer both Roth and regular 401K.
However, I only contribute max and catch up to regular 401K. Should I change and contribute to both regular and Roth 401K?
The contribution limit is the same whether you contribute traditional, Roth, or a combination of both. You don't increase the limit by contributing to both traditional and Roth.

For most people traditional deductible 401k contributions will likely be better.

The income tax code is progressive, with a lower tax rate for lower income. Retirement usually means that employment income has ended. Therefore, most people are in a lower tax bracket in retirement and for most people traditional deductible 401k contributions will probably be better.

In addition when you withdraw from your 401k in retirement, the income is not all taxed at the marginal tax rate specified for your tax bracket. TFB blog post, "The case against Roth 401k". "I think for most people the majority, if not 100%, of the contribution should go to a Traditional 401(k)." "Until you know you can generate from your Traditional 401(k) enough income to fill the lower brackets, it doesn’t make sense to contribute to a Roth 401(k). For people without a traditional defined benefit pension plan, it means the majority of the retirement savings should go to a Traditional 401(k), not Roth."

Will you be eligible for a substantial pension in addition to Social Security? A pension changes that analysis, so that Roth contributions are likely better if you have a significant pension coming in addition to Social Security. TFB blog post, "Most TSP participants should switch to the Roth TSP". That post discussed the effect of a federal pension, but the analysis should hold for other pensions.
Will you be eligible for a substantial pension in addition to Social Security?
What is your profession or occupation?
About how much do you currently have in traditional tax-advantaged accounts?
Do you itemize deductions on your tax return?

Wiki article, "Traditional vs Roth".
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Topic Author
tdmtdv6
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Re: Roll over 401k to Vanguard or not ?

Post by tdmtdv6 » Fri Jan 31, 2020 8:11 pm

Thank you so much ruralavalon for taking the time and give details advice and gret information. I really appreciate it.
ruralavalon wrote:
Thu Jan 30, 2020 3:16 pm
I suggest investing some of the $500k savings and the idle $75k cash in your taxable brokerage accounts.
I think I will invest 200K in VTSAX and 100K in VTIAX. I probably won't need this money in the next 4-5 years.
Do you recommend to cost averaging the next 6-12 months or go in at one shot the whole amount?

Thanks

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ruralavalon
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Re: Roll over 401k to Vanguard or not ?

Post by ruralavalon » Sat Feb 01, 2020 9:26 am

As you add $300k in stocks, don't forget to adjust the bond allocation in your tax-advantaged accounts to maintain your desired asset allocation.

tdmtdv6 wrote:
Fri Jan 31, 2020 8:11 pm
Thank you so much ruralavalon for taking the time and give details advice and gret information. I really appreciate it.
ruralavalon wrote:
Thu Jan 30, 2020 3:16 pm
I suggest investing some of the $500k savings and the idle $75k cash in your taxable brokerage accounts.
I think I will invest 200K in VTSAX and 100K in VTIAX. I probably won't need this money in the next 4-5 years.
Do you recommend to cost averaging the next 6-12 months or go in at one shot the whole amount?

Thanks
There is no way to know in advance which will work better at this time.

I am in the invest it "all at once" camp. When investing a large chunk of money, "all at once" works out better about 2/3 of the time. Please see the Vanguard paper, "Dollar-cost averaging just means taking risk later".

Wiki article, "Dollar-cost averaging". “Lump sum investing will always carries [sic] a higher expected return, because it immediately moves your funds from asset classes with lower expected returns to ones with higher expected returns. Note that higher expected returns do not guarantee that your actual returns will be higher. According to an investopedia article, studies indicate that lump sum investing has produced higher returns 66% of the time”.

Here is another interesting article to read -- "What if you only invested at market peaks?"

The compromise solution is to invest part in a lump sum now, and the rest in stages. For example invest 50% in a lump sum now, and invest the other 50% in stages (like an additional 10% on a predetermined date each month for the next 5 months). Don't needlessly agonize over when the best time may be to invest.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

shess
Posts: 450
Joined: Wed May 17, 2017 12:02 am

Re: Roll over 401k to Vanguard or not ?

Post by shess » Sat Feb 01, 2020 11:32 am

tdmtdv6 wrote:
Fri Jan 31, 2020 8:11 pm
Thank you so much ruralavalon for taking the time and give details advice and gret information. I really appreciate it.
ruralavalon wrote:
Thu Jan 30, 2020 3:16 pm
I suggest investing some of the $500k savings and the idle $75k cash in your taxable brokerage accounts.
I think I will invest 200K in VTSAX and 100K in VTIAX. I probably won't need this money in the next 4-5 years.
Do you recommend to cost averaging the next 6-12 months or go in at one shot the whole amount?
You can find tons of opinions, but, personally, my opinion is to take the option which lets you get started. I've known a lot of people who spend YEARS dithering, and thus miss out on the upside from EITHER lump sum OR dollar-cost averaging. Whenever I find myself in this situation, I just pick a plan which will get it all in in a reasonable timeframe, like a year or 18 months, and then get started. Usually/Often after a few months I find I'm more comfortable with the entire thing and lump sum the rest.

Personally, I'd figure out what your "probably" means. If it means "I can think of no reason why I'd need it, but I can't control my future", then go for it, but if it means "I only have three or for things I'm thinking of using it on, but I'm not sure of them", get sure of them first. Your cash reserves and asset allocation are your designed approach to an unknowable future, you don't think about each dollar.

Topic Author
tdmtdv6
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Re: Roll over 401k to Vanguard or not ?

Post by tdmtdv6 » Sat Feb 01, 2020 2:06 pm

ruralavalon wrote:
Sat Feb 01, 2020 9:26 am
As you add $300k in stocks, don't forget to adjust the bond allocation in your tax-advantaged accounts to maintain your desired asset allocation.
Do you think my real estate investments should be considered similar to bonds? If so, I would be able to be more aggressive in stock index MF.

Thanks

Topic Author
tdmtdv6
Posts: 17
Joined: Wed Jan 29, 2020 2:00 pm

Re: Roll over 401k to Vanguard or not ?

Post by tdmtdv6 » Sat Feb 01, 2020 2:11 pm

tdmtdv6 wrote:
Sat Feb 01, 2020 2:06 pm
I'd figure out what your "probably" means. If it means "I can think of no reason why I'd need it, but I can't control my future",
Yes, in my case it means that, unless we have medical major health issues, job loss and unable to find other jobs, etc.
I will transfer the cash from Ally to Vanguard and going for it.

Thanks

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ruralavalon
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Re: Roll over 401k to Vanguard or not ?

Post by ruralavalon » Sat Feb 01, 2020 2:31 pm

tdmtdv6 wrote:
Sat Feb 01, 2020 2:06 pm
ruralavalon wrote:
Sat Feb 01, 2020 9:26 am
As you add $300k in stocks, don't forget to adjust the bond allocation in your tax-advantaged accounts to maintain your desired asset allocation.
Do you think my real estate investments should be considered similar to bonds? If so, I would be able to be more aggressive in stock index MF.

Thanks
Real estate is not a bond, and does not count as a bond in asset allocation.

If your real estate investment is in shares of a Real Estate Investment Trust (REIT) or REIT fund, then that is a stock.

Otherwise real estate is neither a bond nor a stock.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

SxSW
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Re: Roll over 401k to Vanguard or not ?

Post by SxSW » Sun Feb 02, 2020 12:02 am

ShadesOutWest wrote:
Wed Jan 29, 2020 5:41 pm
If you left the company that 401K was with, you can and should move transfer the account to a Rollover IRA. The reason most people rollover the 401K to an IRA is that they get better and lower costing investment choices. The Vanguard Wellington fund Admiral Shares (VWENX), which is a 67/33 Stock to Bond fund has an expense ratio of only .17. A Vanguard Target [Date] Retirement fund which has an expense ratio of .14...
You may have more investment choices in an IRA, but in many cases those will be more expensive than in a 401k, not less. Vanguard institutional funds used in 401k's typically have lower expense ratios than those available in IRAs, and most certainly lower than the two you mentioned above.

mav12
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Re: Roll over 401k to Vanguard or not ?

Post by mav12 » Sun Feb 02, 2020 1:06 am

I'd roll to TD Ameritrade over Vanguard. I have both and TDA is better because the website response times are faster, much more investment options (Vanguard restricts trading leveraged ETFs), more types of orders ( w/ TDA) like trailing stop loss.

Go with TDA.

lexor
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Re: Roll over 401k to Vanguard or not ?

Post by lexor » Sun Feb 02, 2020 2:13 am

tdmtdv6 wrote:
Wed Jan 29, 2020 2:59 pm
Hello all:
I m a newbie on this forum and seeking for advise.
I have a ~$850k 401k currently with Empower from my previous employer. It has annualized earning of 6.7% in the last 5 years. (Self invest)

Empower is offering to manage the account for a fee of
0.3% annually (of the total balance).

Or I can roll it over to a Vanguard IRA. And pay Vanguard to manage it.

I am looking to retire in the next 4-5 years when I am ~ 57 years old.

Any pro and con to rollover or Not?
Should I manage the investment myself and What should my investment allocation be?

Thank you in advance for your time and response.
If you don't want to manage it yourself I'd recommend WealthFront as they are cheaper than Vanguard and Empower and they are using Vanguard funds underneath anyway. They are basically a Fintech Vanguard clone. They also offer tax lost harvesting although not sure if that will come into play for you.

However none of the advisory services are cheap so if you do take the time to manage it yourself you could save a great deal in fees...as in tens or hundreds of thousands over 30 years. You can use this calculator but keep in mind Vanguard PAS's real expense ratio is about .38 not .3 because you also pay the expenses for the underling funds https://www.begintoinvest.com/expense-ratio-calculator/

If you do decide to manage it yourself, Fidelity has the most competitive index funds https://www.fidelity.com/mutual-funds/i ... ndex-funds
“The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.” -Mr. John C. Bogle

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peterinjapan
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Re: Roll over 401k to Vanguard or not ?

Post by peterinjapan » Sun Feb 02, 2020 8:39 am

mav12 wrote:
Sun Feb 02, 2020 1:06 am
Go with TDA.
I love TDA's website and app and my son uses it. But I hate their "sure, we have a target-date fund, if you don't mind the expense ratio of 1%." Fidelity is the same.

Only Vanguard and Schwab are legit in this area. So consider what kinds of funds you might be wanting to hold in the account.

Topic Author
tdmtdv6
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Re: Roll over 401k to Vanguard or not ?

Post by tdmtdv6 » Sun Feb 02, 2020 4:15 pm

ruralavalon wrote:
Thu Jan 30, 2020 3:16 pm
What are the expense ratios as charged in your old employer's 401k plan?

What funds are offered in your new employer's 401k plan? Please give fund names, tickers and expense ratios.

It depends almost entirely on expenses and funds offered, information not provided in your post
Old 401K. Very low maintenance fee ~$100/yr
RERGX expense 0.49%, 23% current allocation
VSCPX 0.03%, 6%
VMCPX 0.03%, 6%
VFIAX 0.01% 24%
VBTIX 0.035% 29%
VTSNX
Prudential Core Plus Bond class 12 0.035%, 12% current allocation
It also has many other funds and investment choices

Current 401k
VFIAX Vanguard 500 Index Admiral expense 0.04%, 52% current allocation
VTWNX Vanguard Target Retire. 2020 0.13%, 32%
VTTVX Vanguard Target Retier. 2025 0.13%, 16%
VTIAX
They also have various Vanguard target Retire. 2030, 2035, 2040. Additional Large, Med/Small US equity Fund
dbr wrote:
Wed Jan 29, 2020 5:43 pm
What you don't mention are the fund choices in the 401k. If they are lousy it might be best anyway to roll over the money. If they are good, leaving it alone makes sense. If the new 401k is good or better and they allow rollovers, which many plans do not, that could be a good choice.
lakpr wrote:
Wed Jan 29, 2020 5:27 pm
Avoid that rollover to an IRA, if you can help it. Choose to keep the funds in the old 401k, or roll it over to new 401k.
shess wrote:
Wed Jan 29, 2020 9:35 pm
I'm retired early, and recently realized something I'm missing out on - the rule of 55:
https://www.thebalance.com/what-is-the- ... 55-2894280
Under this rule, you can withdraw penalty free from the 401k from the place you retire from if you retire between 55 and 59 1/2.
The previous employer is much bigger than the current employer and the previous 401K has better choices and better expense ratios.
For the old 401K account, I think I will convert all RERGX to VTSXN, and all Prudential Core plus Bond Class 12 to VFIAX.
And will transfer them to my current employer before I retire. (Plan in 4-5 years)

Thanks,

ClaycordJCA
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Re: Roll over 401k to Vanguard or not ?

Post by ClaycordJCA » Sun Feb 02, 2020 4:56 pm

peterinjapan wrote:
Sun Feb 02, 2020 8:39 am
mav12 wrote:
Sun Feb 02, 2020 1:06 am
Go with TDA.
I love TDA's website and app and my son uses it. But I hate their "sure, we have a target-date fund, if you don't mind the expense ratio of 1%." Fidelity is the same.

Only Vanguard and Schwab are legit in this area. So consider what kinds of funds you might be wanting to hold in the account.
The Fidelity Freedom (aka Target Date) Index Funds have a .12% expense ratio. They are also legit. Investors just have to be careful to select the Index fund and not the standard target date fund.

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