Any reason not to combine your 401K when changing employers?

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portfolio123
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Any reason not to combine your 401K when changing employers?

Post by portfolio123 »

I recently changed employers and new employer has 401K with a different provider than my prior employer. Any reason I would not want to roll my savings all into one account where my new firm's 401K is? Main thing I could think of are if fees are notably different between the two places.
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JoeRetire
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Re: Any reason not to combine your 401K when changing employers?

Post by JoeRetire »

portfolio123 wrote: Fri Sep 11, 2020 1:45 pmAny reason I would not want to roll my savings all into one account where my new firm's 401K is?
If your old 401k is much better than the new one, don't roll your savings into the new one. Consider moving the funds into a rollover IRA instead.
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Re: Any reason not to combine your 401K when changing employers?

Post by JBTX »

If there were some reason why you wanted to roll the old one over to a rollover IRA or a Roth conversion. Or maybe old one has better selection. Like you said, depends on expenses. Wife and I have several old 401ks.
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Re: Any reason not to combine your 401K when changing employers?

Post by JBTX »

JoeRetire wrote: Fri Sep 11, 2020 1:47 pm
portfolio123 wrote: Fri Sep 11, 2020 1:45 pmAny reason I would not want to roll my savings all into one account where my new firm's 401K is?
If your old 401k is much better than the new one, don't roll your savings into the new one. Consider moving the funds into a rollover IRA instead.
Or just leave it in old 401k?
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unclescrooge
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Re: Any reason not to combine your 401K when changing employers?

Post by unclescrooge »

JBTX wrote: Fri Sep 11, 2020 1:49 pm If there were some reason why you wanted to roll the old one over to a rollover IRA or a Roth conversion. Or maybe old one has better selection. Like you said, depends on expenses. Wife and I have several old 401ks.
Terrible idea. Consolidate into one place. Cognitive decline can happen suddenly. Make it easy for the next person managing your affairs.
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Re: Any reason not to combine your 401K when changing employers?

Post by Money_Badger »

I had several old 401Ks that I am in the middle of rolling over.

My new employer's plan has as good or better choices than the prior plans, so to me it makes sense to roll it over. If nothing else, for simplicity.
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Re: Any reason not to combine your 401K when changing employers?

Post by ddurrett896 »

All about that ER babyyyyyyy :sharebeer
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Re: Any reason not to combine your 401K when changing employers?

Post by lakpr »

My current 401k plan has excellent stock funds (VIIIX - Vanguard Institutional Class 500 Index shares) at 0.02%, but the lowest-expense pure bond fund is the Metropolitan West Total Return Bond fund at 0.38% expense ratio.

My old 401k plan has access to VBTIX (Vanguard Institutional Class Total Bond Market Index shares) at 0.04%.

So when I invest only in stocks in my current 401k, and gradually move out of stocks and into bonds in my old 401k. This will let me avoid having to invest in the Metropolitan fund for at least next 6 years (based on my desired 70:30 allocation).
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Re: Any reason not to combine your 401K when changing employers?

Post by SmileyFace »

Compare the fees and investment choices. If they are more favorable at new place you should move them.

Another option is move to an IRA BUT Before you do a rollover IRA (this used to be the best option - you move all old employment 401ks to a common IRA account whereby you have better investment options/control) you need to look at the side-effects it might cause if any apply to you (e.g. if you are doing Backdoor Roth IRA moves today it will cause issues).
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Re: Any reason not to combine your 401K when changing employers?

Post by jm1495 »

Expense ratios and available funds.
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Re: Any reason not to combine your 401K when changing employers?

Post by GMT-8 »

We simplified from:
  • 1 Regular IRA
  • 1 SEP IRA
  • 1 401(k)
  • 1 minimal pension cashout option
  • 1 supplemental retirement
  • 1 early retirement annuity
  • 1 TIAA annuity
  • 1 403(b) CREF
to
  • 1 Rollover IRA for me
  • 1 Rollover IRA for her
  • 1 TIAA annuity (ending payout 2021)
I can't tell you how much easier it is now to manage our lives and our asset allocations. Not to mention saving 1-2% fees on several accounts.
Even though the owners at my last job, a small company with 5 in the plan, wanted my IRA funds, I never did move them to the 401(k) because the investment choices weren't as attractive as keeping it at Vanguard. (It would have increased the plan manager's take significantly.)

Good luck with your move to the new job.

GMT
Last edited by GMT-8 on Fri Sep 11, 2020 2:20 pm, edited 1 time in total.
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Re: Any reason not to combine your 401K when changing employers?

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Re: Any reason not to combine your 401K when changing employers?

Post by gwe67 »

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Re: Any reason not to combine your 401K when changing employers?

Post by JBTX »

unclescrooge wrote: Fri Sep 11, 2020 1:52 pm
JBTX wrote: Fri Sep 11, 2020 1:49 pm If there were some reason why you wanted to roll the old one over to a rollover IRA or a Roth conversion. Or maybe old one has better selection. Like you said, depends on expenses. Wife and I have several old 401ks.
Terrible idea. Consolidate into one place. Cognitive decline can happen suddenly. Make it easy for the next person managing your affairs.

There is really nothing to managing an old 401k invested in targrt date funds. If you were dead set on doing a 3 fund across your entire portfolio then merging into one may make it easier to rebalance.

One theoretical downside is your current employer could decide to save himself money and roll over to a higher employee fee plan with lower costs for owner.
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JoeRetire
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Re: Any reason not to combine your 401K when changing employers?

Post by JoeRetire »

JBTX wrote: Fri Sep 11, 2020 1:50 pm
JoeRetire wrote: Fri Sep 11, 2020 1:47 pm
portfolio123 wrote: Fri Sep 11, 2020 1:45 pmAny reason I would not want to roll my savings all into one account where my new firm's 401K is?
If your old 401k is much better than the new one, don't roll your savings into the new one. Consider moving the funds into a rollover IRA instead.
Or just leave it in old 401k?
Right. That's what "don't roll your savings into the new one" means.

Still, in a rollover IRA, you can direct the money into any funds you choose.
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Re: Any reason not to combine your 401K when changing employers?

Post by anon_investor »

JoeRetire wrote: Sat Sep 12, 2020 5:36 am
JBTX wrote: Fri Sep 11, 2020 1:50 pm
JoeRetire wrote: Fri Sep 11, 2020 1:47 pm
portfolio123 wrote: Fri Sep 11, 2020 1:45 pmAny reason I would not want to roll my savings all into one account where my new firm's 401K is?
If your old 401k is much better than the new one, don't roll your savings into the new one. Consider moving the funds into a rollover IRA instead.
Or just leave it in old 401k?
Right. That's what "don't roll your savings into the new one" means.

Still, in a rollover IRA, you can direct the money into any funds you choose.
Unless the OP wants to utilize the backdoor Roth, then a rollover IRA is not an option. Also 401ks offer better protection from creditors than IRAs in some states.

Generally, overall high costs (expense ratios, flat admin/management fees, AUM fees) would be the main reason not to consolidate with the new 401k. Another reason would be if you are holding company stock in your 401k and plan to utilize NUA tax treatment in the future.
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Re: Any reason not to combine your 401K when changing employers?

Post by Jack FFR1846 »

Some things to be aware of: Your new employer's cost could be pushed onto you. Look at a monthly statement for a management fee. Also know that this can change year to year. This can happen with the old employer's plan as well.

Of course ERs.

With either employer, they can change who administers the 401k at their own whim. So one year, you've got a great, low cost Fidelity plan with no administration fees and then, suddenly, you're with Mass Mutual with horrible ERs and a management fee on top. Keeping this at the old employer gives you options to roll the money out to either your new 401k or to an IRA. If you roll everything into the new employer's 401k and they decide to make this same change, you're stuck with it.

Of course an IRA makes Roth conversions difficult or costly.
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Re: Any reason not to combine your 401K when changing employers?

Post by JoMoney »

401k rollovers/transfers can take a lot of time. For some reason, many people (including myself) find the period 'out of the market' nerve racking, as the market does what it does, and you're potentially missing out.
Ironic, since this is a period where you're not exposed to the markets "risk" at all.

If your new 401k is held at the same place, maybe they can make this happen quickly with very little time 'out of the market'. I recently transferred my old employers 401k at Fidelity into a rollover IRA at Fidelity and they made the transfer very quickly. If I had rolled it over to an account outside of Fidelity it would have involved a lot more paperwork, checks going through the mail, and several weeks (minimum) 'out of the market'.

Transferring the 401k into a Rollover IRA also allowed me to split out some after-tax 401k contributions into a Roth IRA. Also, I have been expecting that all my 401ks would eventually wind up in a Rollover IRA eventually anyway. Companies go out of business, merge, and make other changes on the regular basis. I wouldn't expect a companies 401k plan to remain in place, for the rest of my life anyways. The only advantages I see to keeping money in a 401k vs IRA are the superior judgement protections from creditors ( which isn't completely lacking in an IRA either ), and age 55 rule on 401k's that allows you to begin withdrawing from a 401k if you retire at age 55 instead of age 59.5 required to withdraw without penalty from an IRA... but if I retire early it will likely use a "Roth IRA Conversion Ladder" method anyways - which points me to using a rollover IRA rather than clinging to the 401k accounts since I can't do partial rollover/conversions from my prior 401k.
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Re: Any reason not to combine your 401K when changing employers?

Post by unclescrooge »

JBTX wrote: Fri Sep 11, 2020 2:35 pm
unclescrooge wrote: Fri Sep 11, 2020 1:52 pm
JBTX wrote: Fri Sep 11, 2020 1:49 pm If there were some reason why you wanted to roll the old one over to a rollover IRA or a Roth conversion. Or maybe old one has better selection. Like you said, depends on expenses. Wife and I have several old 401ks.
Terrible idea. Consolidate into one place. Cognitive decline can happen suddenly. Make it easy for the next person managing your affairs.

There is really nothing to managing an old 401k invested in targrt date funds. If you were dead set on doing a 3 fund across your entire portfolio then merging into one may make it easier to rebalance.

One theoretical downside is your current employer could decide to save himself money and roll over to a higher employee fee plan with lower costs for owner.
It's not about managing it. It's about leaving a trail of old 401k accounts. If you change jobs every 5 years, over a 40 year career that's 8 accounts.

You aggregate them to simplify your life, and make it easier on yourself or your heirs if you need to take distributions.

My cousin had a 401k from am old company he had left 6 years ago. That company got acquired a few times and it took him a few months to track down where it was and get it sorted.
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Re: Any reason not to combine your 401K when changing employers?

Post by Brianmcg321 »

If your new 401k is terrible with high fees, I would keep it at the old one or roll it over to an IRA.
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Re: Any reason not to combine your 401K when changing employers?

Post by ruralavalon »

portfolio123 wrote: Fri Sep 11, 2020 1:45 pm I recently changed employers and new employer has 401K with a different provider than my prior employer. Any reason I would not want to roll my savings all into one account where my new firm's 401K is? Main thing I could think of are if fees are notably different between the two places.
It depends almost entirely on the funds offered and expenses charged, the issue you have already identified.
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Re: Any reason not to combine your 401K when changing employers?

Post by Watty »

Any reason not to combine your 401K when changing employers?
Here are a couple;

1) I had an employer with a good 401k plan with Fidelity switch 401k to a mediocre insurance company 401k, fortunately among a lot of high expense mutual funds they had a few good index funds so I was OK. If you move the money to your new companies 401k then you will not be able to do anything if they change 401k companies five years from now.

2) There are all sorts of permutations but if something happens like you get married and later get divorced then your current companies might be split in the divorce. Your old 401k might still be considered a premarital asset of yours. This is complex and may vary depending on your state laws.

3) If you are 55 then you may be able to make withdrawals from your old 401k without paying a penality.
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Re: Any reason not to combine your 401K when changing employers?

Post by elle »

+1 to all the comments re: expense ratios/fund options
+1 also to simplicity in maintaining a single account.

I have always maintained a single until the last 2 employers.
-2 ago has great expense ratios. Unlikely any future employer will match or even come close to it.
-1 ago allows to purchase into company stocks in 401k

I have given up on a single account for the above reasons. (Yes I realize that company stocks is not a boglehead approach. I’ve been treating that as fun money)
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Re: Any reason not to combine your 401K when changing employers?

Post by JBTX »

unclescrooge wrote: Sat Sep 12, 2020 9:26 am
JBTX wrote: Fri Sep 11, 2020 2:35 pm
unclescrooge wrote: Fri Sep 11, 2020 1:52 pm
JBTX wrote: Fri Sep 11, 2020 1:49 pm If there were some reason why you wanted to roll the old one over to a rollover IRA or a Roth conversion. Or maybe old one has better selection. Like you said, depends on expenses. Wife and I have several old 401ks.
Terrible idea. Consolidate into one place. Cognitive decline can happen suddenly. Make it easy for the next person managing your affairs.

There is really nothing to managing an old 401k invested in targrt date funds. If you were dead set on doing a 3 fund across your entire portfolio then merging into one may make it easier to rebalance.

One theoretical downside is your current employer could decide to save himself money and roll over to a higher employee fee plan with lower costs for owner.
It's not about managing it. It's about leaving a trail of old 401k accounts. If you change jobs every 5 years, over a 40 year career that's 8 accounts.

You aggregate them to simplify your life, and make it easier on yourself or your heirs if you need to take distributions.

My cousin had a 401k from am old company he had left 6 years ago. That company got acquired a few times and it took him a few months to track down where it was and get it sorted.
I understand there may be good reasons to roll it in. There are also valid reasons not to. YMMV. But a blanket assessment of "it's terrible idea" is a simplistic assessment. In our case all the 401ks are with Fidelity or Vanguard / Vanguard Ascensus. If they were with "Joe and Stan's discount 401ks" I'd probably agree with you.
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Re: Any reason not to combine your 401K when changing employers?

Post by JBTX »

JoMoney wrote: Sat Sep 12, 2020 8:31 am 401k rollovers/transfers can take a lot of time. For some reason, many people (including myself) find the period 'out of the market' nerve racking, as the market does what it does, and you're potentially missing out.
Ironic, since this is a period where you're not exposed to the markets "risk" at all.

If your new 401k is held at the same place, maybe they can make this happen quickly with very little time 'out of the market'. I recently transferred my old employers 401k at Fidelity into a rollover IRA at Fidelity and they made the transfer very quickly. If I had rolled it over to an account outside of Fidelity it would have involved a lot more paperwork, checks going through the mail, and several weeks (minimum) 'out of the market'.

Transferring the 401k into a Rollover IRA also allowed me to split out some after-tax 401k contributions into a Roth IRA. Also, I have been expecting that all my 401ks would eventually wind up in a Rollover IRA eventually anyway. Companies go out of business, merge, and make other changes on the regular basis. I wouldn't expect a companies 401k plan to remain in place, for the rest of my life anyways. The only advantages I see to keeping money in a 401k vs IRA are the superior judgement protections from creditors ( which isn't completely lacking in an IRA either ), and age 55 rule on 401k's that allows you to begin withdrawing from a 401k if you retire at age 55 instead of age 59.5 required to withdraw without penalty from an IRA... but if I retire early it will likely use a "Roth IRA Conversion Ladder" method anyways - which points me to using a rollover IRA rather than clinging to the 401k accounts since I can't do partial rollover/conversions from my prior 401k.
Agree. Some 401ks are going to send in a check and make you do it that way. The money is out of the market briefly and there is always the remote chance something gets hosed up from an administrative standpoint
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Re: Any reason not to combine your 401K when changing employers?

Post by JBTX »

JoeRetire wrote: Sat Sep 12, 2020 5:36 am
JBTX wrote: Fri Sep 11, 2020 1:50 pm
JoeRetire wrote: Fri Sep 11, 2020 1:47 pm
portfolio123 wrote: Fri Sep 11, 2020 1:45 pmAny reason I would not want to roll my savings all into one account where my new firm's 401K is?
If your old 401k is much better than the new one, don't roll your savings into the new one. Consider moving the funds into a rollover IRA instead.
Or just leave it in old 401k?
Right. That's what "don't roll your savings into the new one" means.

Still, in a rollover IRA, you can direct the money into any funds you choose.
Sure. In some cases it makes sense. But not when:

- you may want to do Backdoor Roth in the future
- the 401k plan actually has lower fees than individual accounts. That is true for all the 401ks we have. Can be especially true with Target date funds. Vanguard investor is 0.15. There is no admiral. Vanguard institutional is around.07 / .08 in 401k
- 401ks plans provide greater liability protections, especially in some states like CA. I think a poster in this forum had an IRA depleted in a lawsuit in CA. That does not happen in a 401k
- old 401k may have better, or different selection of funds, that appeal to you.
- rolling into new 401k requires brief period out of market and minor administrative hassle
- new 401k could change to a worse administrator.
- the old 401k can be rolled over at any time in the future if the need arises. In most ongoing plans once you are in, you stay in as long as you are employed.
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Re: Any reason not to combine your 401K when changing employers?

Post by JoeRetire »

anon_investor wrote: Sat Sep 12, 2020 8:09 am
JoeRetire wrote: Sat Sep 12, 2020 5:36 am
JBTX wrote: Fri Sep 11, 2020 1:50 pm
JoeRetire wrote: Fri Sep 11, 2020 1:47 pm
portfolio123 wrote: Fri Sep 11, 2020 1:45 pmAny reason I would not want to roll my savings all into one account where my new firm's 401K is?
If your old 401k is much better than the new one, don't roll your savings into the new one. Consider moving the funds into a rollover IRA instead.
Or just leave it in old 401k?
Right. That's what "don't roll your savings into the new one" means.

Still, in a rollover IRA, you can direct the money into any funds you choose.
Unless the OP wants to utilize the backdoor Roth, then a rollover IRA is not an option.
Consider a rollover IRA and other available options. All the available options have pros and cons.
Last edited by JoeRetire on Sat Sep 12, 2020 2:29 pm, edited 1 time in total.
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Re: Any reason not to combine your 401K when changing employers?

Post by JoeRetire »

JBTX wrote: Sat Sep 12, 2020 1:13 pm
JoeRetire wrote: Sat Sep 12, 2020 5:36 am
JBTX wrote: Fri Sep 11, 2020 1:50 pm
JoeRetire wrote: Fri Sep 11, 2020 1:47 pm
portfolio123 wrote: Fri Sep 11, 2020 1:45 pmAny reason I would not want to roll my savings all into one account where my new firm's 401K is?
If your old 401k is much better than the new one, don't roll your savings into the new one. Consider moving the funds into a rollover IRA instead.
Or just leave it in old 401k?
Right. That's what "don't roll your savings into the new one" means.

Still, in a rollover IRA, you can direct the money into any funds you choose.
Sure. In some cases it makes sense. But not when:

- you may want to do Backdoor Roth in the future
- the 401k plan actually has lower fees than individual accounts. That is true for all the 401ks we have. Can be especially true with Target date funds. Vanguard investor is 0.15. There is no admiral. Vanguard institutional is around.07 / .08 in 401k
- 401ks plans provide greater liability protections, especially in some states like CA. I think a poster in this forum had an IRA depleted in a lawsuit in CA. That does not happen in a 401k
- old 401k may have better, or different selection of funds, that appeal to you.
- rolling into new 401k requires brief period out of market and minor administrative hassle
- new 401k could change to a worse administrator.
- the old 401k can be rolled over at any time in the future if the need arises. In most ongoing plans once you are in, you stay in as long as you are employed.
All good points. If the old 401k is "good enough" for your purposes, then leave the money there. Otherwise you have several options, including a rollover IRA, which should then be considered and weighed against other options.
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Re: Any reason not to combine your 401K when changing employers?

Post by unclescrooge »

JBTX wrote: Sat Sep 12, 2020 12:58 pm
unclescrooge wrote: Sat Sep 12, 2020 9:26 am
JBTX wrote: Fri Sep 11, 2020 2:35 pm
unclescrooge wrote: Fri Sep 11, 2020 1:52 pm
JBTX wrote: Fri Sep 11, 2020 1:49 pm If there were some reason why you wanted to roll the old one over to a rollover IRA or a Roth conversion. Or maybe old one has better selection. Like you said, depends on expenses. Wife and I have several old 401ks.
Terrible idea. Consolidate into one place. Cognitive decline can happen suddenly. Make it easy for the next person managing your affairs.

There is really nothing to managing an old 401k invested in targrt date funds. If you were dead set on doing a 3 fund across your entire portfolio then merging into one may make it easier to rebalance.

One theoretical downside is your current employer could decide to save himself money and roll over to a higher employee fee plan with lower costs for owner.
It's not about managing it. It's about leaving a trail of old 401k accounts. If you change jobs every 5 years, over a 40 year career that's 8 accounts.

You aggregate them to simplify your life, and make it easier on yourself or your heirs if you need to take distributions.

My cousin had a 401k from am old company he had left 6 years ago. That company got acquired a few times and it took him a few months to track down where it was and get it sorted.
I understand there may be good reasons to roll it in. There are also valid reasons not to. YMMV. But a blanket assessment of "it's terrible idea" is a simplistic assessment. In our case all the 401ks are with Fidelity or Vanguard / Vanguard Ascensus. If they were with "Joe and Stan's discount 401ks" I'd probably agree with you.
It doesn't matter if they are all with Fidelity. Separate 401k accounts mean separate administrators and numerous layers of paperwork. Fidelity is just the custodian. They are not the administrator.

If you believe in simplifying investments and 3 fund portfolios, maintaining several different 401ks is incongruous with that idea.
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Re: Any reason not to combine your 401K when changing employers?

Post by Alan S. »

Don't forget NUA potential.

If any old 401k holds employer shares that are highly appreciated OR might become highly appreciated in the future, any rollover to an IRA or to new 401k plan will snuff the NUA potential of those shares. Instead of paying the lower LTCG rates on those gains, you will pay ordinary income.

The new employer cannot carry over the NUA from a former employer unless they bought out the former employer.
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Re: Any reason not to combine your 401K when changing employers?

Post by JBTX »

unclescrooge wrote: Sat Sep 12, 2020 3:29 pm
JBTX wrote: Sat Sep 12, 2020 12:58 pm
unclescrooge wrote: Sat Sep 12, 2020 9:26 am
JBTX wrote: Fri Sep 11, 2020 2:35 pm
unclescrooge wrote: Fri Sep 11, 2020 1:52 pm

Terrible idea. Consolidate into one place. Cognitive decline can happen suddenly. Make it easy for the next person managing your affairs.

There is really nothing to managing an old 401k invested in targrt date funds. If you were dead set on doing a 3 fund across your entire portfolio then merging into one may make it easier to rebalance.

One theoretical downside is your current employer could decide to save himself money and roll over to a higher employee fee plan with lower costs for owner.
It's not about managing it. It's about leaving a trail of old 401k accounts. If you change jobs every 5 years, over a 40 year career that's 8 accounts.

You aggregate them to simplify your life, and make it easier on yourself or your heirs if you need to take distributions.

My cousin had a 401k from am old company he had left 6 years ago. That company got acquired a few times and it took him a few months to track down where it was and get it sorted.
I understand there may be good reasons to roll it in. There are also valid reasons not to. YMMV. But a blanket assessment of "it's terrible idea" is a simplistic assessment. In our case all the 401ks are with Fidelity or Vanguard / Vanguard Ascensus. If they were with "Joe and Stan's discount 401ks" I'd probably agree with you.
It doesn't matter if they are all with Fidelity. Separate 401k accounts mean separate administrators and numerous layers of paperwork. Fidelity is just the custodian. They are not the administrator.

If you believe in simplifying investments and 3 fund portfolios, maintaining several different 401ks is incongruous with that idea.
What administration and paperwork???
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Re: Any reason not to combine your 401K when changing employers?

Post by unclescrooge »

JBTX wrote: Sat Sep 12, 2020 5:16 pm
unclescrooge wrote: Sat Sep 12, 2020 3:29 pm
JBTX wrote: Sat Sep 12, 2020 12:58 pm
unclescrooge wrote: Sat Sep 12, 2020 9:26 am
JBTX wrote: Fri Sep 11, 2020 2:35 pm


There is really nothing to managing an old 401k invested in targrt date funds. If you were dead set on doing a 3 fund across your entire portfolio then merging into one may make it easier to rebalance.

One theoretical downside is your current employer could decide to save himself money and roll over to a higher employee fee plan with lower costs for owner.
It's not about managing it. It's about leaving a trail of old 401k accounts. If you change jobs every 5 years, over a 40 year career that's 8 accounts.

You aggregate them to simplify your life, and make it easier on yourself or your heirs if you need to take distributions.

My cousin had a 401k from am old company he had left 6 years ago. That company got acquired a few times and it took him a few months to track down where it was and get it sorted.
I understand there may be good reasons to roll it in. There are also valid reasons not to. YMMV. But a blanket assessment of "it's terrible idea" is a simplistic assessment. In our case all the 401ks are with Fidelity or Vanguard / Vanguard Ascensus. If they were with "Joe and Stan's discount 401ks" I'd probably agree with you.
It doesn't matter if they are all with Fidelity. Separate 401k accounts mean separate administrators and numerous layers of paperwork. Fidelity is just the custodian. They are not the administrator.

If you believe in simplifying investments and 3 fund portfolios, maintaining several different 401ks is incongruous with that idea.
What administration and paperwork???
Sounds like you don't ever plan to withdraw these assets or leave them to anyone. In that case, carry on.👍
Townline Lake
Posts: 11
Joined: Sun Apr 16, 2017 2:09 pm

Re: Any reason not to combine your 401K when changing employers?

Post by Townline Lake »

I have one older 401k with a prior employer and have left it there as I retired from that company at just over age 55 and can access that money if needed. I plan to roll this into my present 401k at age 59.5 if still working then. It is only about 5% of my portfolio but gives me some options to access these funds if ever needed.
invest4
Posts: 221
Joined: Wed Apr 24, 2019 2:19 am

Re: Any reason not to combine your 401K when changing employers?

Post by invest4 »

As others have noted, a number of factors may inform your decision. For myself, when I changed employers, I liked the perceived freedom of the separate IRA vs combining it with the 401k of my new employer. A simple example of this is that I was able to take advantage of some bonuses that were offered for bringing in new monies when opening the IRA account and am currently looking into doing so again in pursuit of a relationship mortgage with one of the usual suspects (Wells, Citibank, etc.)

I think my current employer's 401k is very good and having the accounts combined would be "neat and tidy". Nonetheless, it is easy enough to manage them in harmony with my overall plan for investing (fortunately, there are only the two of them so far) and I remain happy with having more control / freedom with the separate account as mentioned above. I never considered maintaining the account with my previous employer as I found their overall offering to be...lackluster.
Topic Author
portfolio123
Posts: 43
Joined: Mon Jul 13, 2020 9:36 pm

Re: Any reason not to combine your 401K when changing employers?

Post by portfolio123 »

Appreciate the feedback, all!
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