Should wife rollover her 401 to IRA? Which funds?

[Goofy]

My wife is still working, but her large 401 was from a previous employer and essentially closed out. It's with Fidelity, but obviously available funds are limited by Nationwide's plan. Wife is risk adverse and throughout her entire career, has seen some insurance industry nightmares, so protecting her assets is a priority for her.

We live in a state that protects our IRA from Federal and most civil suits, though it won't protect an IRA we leave to our heirs. WOW, you say, why are you thinking about asset seizure??? Well, we still have teens and teens do stupid things (fortunately ours have not, though there's a skunk lying in the road today that might disagree). We've moved their vehicles into their names and incur the higher auto rates, to protect home and assets from litigation. I had always told her that our 401s are protected anyway, which they are, but as IRAs they don't enjoy the same protection (I was today year's old when I learned that).

She'll likely retire in 3 years and aside from limited funds, and inconvenience, is there any reason to move this into an IRA?

If we don't move it into an IRA, which funds make the most sense for 70% stock (50% Domestic, 20% foreign), 25% Bond, and 5% short term? I guess I need to look at what Nationwide has available.

Or, asking you all, do you think Nationwide has worthwhile Funds and is their cost ratio reasonable enough to stay?

[bloom2708]

The only reason not to move to a Rollover Trad IRA is if one/both of you do Back Door Roth contributions.

If you are over the income limits and can't do regular Roth IRA. The existence of Trad IRA dollars brings Pro Rata and is messy.

We never hit the income limits, so if one of us left a job, we rolled the 401k to Vanguard with our Roths and Taxable.

You could also see if you can move it into her current 401k.

As for the mix, we currently have S&P 500 index and then Individually purchased short term Treasuries. I've been doing a short ladder with the fixed portion. You can certainly mix in the Total US stock index or if you desire, Total International. We are past the point of needing to ride the rollercoaster of International stocks, but that is a whole other topic. Maybe international stocks will crush US soon. Nobody knows.

Hopefully others can add their ideas.

[snic]

My wife is still working, but her large 401 was from a previous employer and essentially closed out. It's with Fidelity, but obviously available funds are limited by Nationwide's plan. Wife is risk adverse and throughout her entire career, has seen some insurance industry nightmares, so protecting her assets is a priority for her.

We live in a state that protects our IRA from Federal and most civil suits, though it won't protect an IRA we leave to our heirs. WOW, you say, why are you thinking about asset seizure??? Well, we still have teens and teens do stupid things (fortunately ours have not, though there's a skunk lying in the road today that might disagree). We've moved their vehicles into their names and incur the higher auto rates, to protect home and assets from litigation. I had always told her that our 401s are protected anyway, which they are, but as IRAs they don't enjoy the same protection (I was today year's old when I learned that).

She'll likely retire in 3 years and aside from limited funds, and inconvenience, is there any reason to move this into an IRA?

If we don't move it into an IRA, which funds make the most sense for 70% stock (50% Domestic, 20% foreign), 25% Bond, and 5% short term? I guess I need to look at what Nationwide has available.

Or, asking you all, do you think Nationwide has worthwhile Funds and is their cost ratio reasonable enough to stay?

Have you considered an umbrella insurance policy? That will protect your assets against lawsuits arising from the hypothetical future stupid acts of your teenagers. Then you'll be able to make decisions about the rollover that are influenced by what's best for your financial needs, not theoretical legal needs.

[Goofy]

My wife is still working, but her large 401 was from a previous employer and essentially closed out. It's with Fidelity, but obviously available funds are limited by Nationwide's plan. Wife is risk adverse and throughout her entire career, has seen some insurance industry nightmares, so protecting her assets is a priority for her.

We live in a state that protects our IRA from Federal and most civil suits, though it won't protect an IRA we leave to our heirs. WOW, you say, why are you thinking about asset seizure??? Well, we still have teens and teens do stupid things (fortunately ours have not, though there's a skunk lying in the road today that might disagree). We've moved their vehicles into their names and incur the higher auto rates, to protect home and assets from litigation. I had always told her that our 401s are protected anyway, which they are, but as IRAs they don't enjoy the same protection (I was today year's old when I learned that).

She'll likely retire in 3 years and aside from limited funds, and inconvenience, is there any reason to move this into an IRA?

If we don't move it into an IRA, which funds make the most sense for 70% stock (50% Domestic, 20% foreign), 25% Bond, and 5% short term? I guess I need to look at what Nationwide has available.

Or, asking you all, do you think Nationwide has worthwhile Funds and is their cost ratio reasonable enough to stay?

Have you considered an umbrella insurance policy? That will protect your assets against lawsuits arising from the hypothetical future stupid acts of your teenagers. Then you'll be able to make decisions about the rollover that are influenced by what's best for your financial needs, not theoretical legal needs.

Yep. i never said her fears were rational I have to "sell" my wife on a course of action, but of course she needs to feel comfortable, as we all do, with how our money is invested, protected, etc. I'm trying to balance that out and remain married

[Goofy]

The only reason not to move to a Rollover Trad IRA is if one/both of you do Back Door Roth contributions.

If you are over the income limits and can't do regular Roth IRA. The existence of Trad IRA dollars brings Pro Rata and is messy.

We never hit the income limits, so if one of us left a job, we rolled the 401k to Vanguard with our Roths and Taxable.

You could also see if you can move it into her current 401k.

As for the mix, we currently have S&P 500 index and then Individually purchased short term Treasuries. I've been doing a short ladder with the fixed portion. You can certainly mix in the Total US stock index or if you desire, Total International. We are past the point of needing to ride the rollercoaster of International stocks, but that is a whole other topic. Maybe international stocks will crush US soon. Nobody knows.

Hopefully others can add their ideas.

Thanks. The '25 income limit appears to be $236,000 filing jointly, so we're good there. I'll have to talk her off the ledge regarding seizure of assets.

[Mike Scott]

Some of it depends on the choices and costs in the 401k compared to what is available in the IRA. However, a perception of safety is difficult to put a $ value on but perhaps you could factor in the cost of umbrella insurance against the potential for lower fees in the IRA.