Help with 401k rollover strategy

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Calygos
Posts: 574
Joined: Tue Jan 13, 2015 3:48 pm

Help with 401k rollover strategy

Post by Calygos » Thu Aug 09, 2018 7:01 pm

So it looks like I'm getting a really great job offer and will likely start early next month. So I'll want to ultimately roll over my current Principal 401k to my Vanguard tIRA. My total portfolio holdings across my 401k and my Vanguard tIRA, Roth IRA, and regular investment account consist of:

Vanguard Growth Index Fund Admiral Shares (VIGAX): $146k
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX): $262k
Vanguard Total Int'l Stock Market Index Fund Admiral Shares (VTIAX): $87k
Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX): $118k

My approximate AA is very roughly

US Equities: 65%
Int'l Equities: 15%
Bonds 20%

My 401k is all of the VIGAX, which is 24% of the portfolio and 36% of the US Equities, so if I were to rollover to the tIRA and then exchange all of the VIGAX for VTIAX, that would put me at about 29/51 US/Intl equities, or about the current market balance of the two.

So I'm debating amongst the following:

1. Just keep VIGAX
2. Exchange 100% VIGAX for VTIAX to reach the world US vs. Int'l AA
3. Exchange 100% VIGAX for VTSAX to maintain current AA

I know there are a lot of thoughts on international in the Investing Theory/News forum. To be honest, I'd started working on a Investment Policy Statement but never finished and should really revisit it.

Any thoughts on the above approaches? Also, FWIW, I don't know yet who the new company's 401k plan is with or what the options are, but I do know they have a MUCH better matching strategy than my current company by about an order of magnitude and I always contribute the max to my 401k.

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Help with 401k rollover strategy

Post by PFInterest » Thu Aug 09, 2018 7:07 pm

Why don't you leave it? Or move it to your new job?
Not doing the backdoor rIRA then?

Calygos
Posts: 574
Joined: Tue Jan 13, 2015 3:48 pm

Re: Help with 401k rollover strategy

Post by Calygos » Thu Aug 09, 2018 7:22 pm

PFInterest wrote:
Thu Aug 09, 2018 7:07 pm
Why don't you leave it? Or move it to your new job?
Not doing the backdoor rIRA then?
I'd rather not leave stuff lying around, I'm a minimalist and I'd prefer to consolidate and have a single place to manage my non-401k investments. I'm also not really familiar with a backdoor Roth IRA. I do have a Roth and I contribute the current $5500 annual max. Although I did just quickly Google what a backdoor Roth IRA is and this new job may put me over the regular Roth IRA contribution income limit (I'm not too far off now and they said their offer could easily blow away my current salary). So I guess I should look into the backdoor method.

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Help with 401k rollover strategy

Post by PFInterest » Thu Aug 09, 2018 7:26 pm

Calygos wrote:
Thu Aug 09, 2018 7:22 pm
PFInterest wrote:
Thu Aug 09, 2018 7:07 pm
Why don't you leave it? Or move it to your new job?
Not doing the backdoor rIRA then?
I'd rather not leave stuff lying around, I'm a minimalist and I'd prefer to consolidate and have a single place to manage my non-401k investments. I'm also not really familiar with a backdoor Roth IRA. I do have a Roth and I contribute the current $5500 annual max. Although I did just quickly Google what a backdoor Roth IRA is and this new job may put me over the regular Roth IRA contribution income limit (I'm not too far off now and they said their offer could easily blow away my current salary). So I guess I should look into the backdoor method.
There's your answer.

Calygos
Posts: 574
Joined: Tue Jan 13, 2015 3:48 pm

Re: Help with 401k rollover strategy

Post by Calygos » Thu Aug 09, 2018 7:28 pm

PFInterest wrote:
Thu Aug 09, 2018 7:26 pm
Calygos wrote:
Thu Aug 09, 2018 7:22 pm
PFInterest wrote:
Thu Aug 09, 2018 7:07 pm
Why don't you leave it? Or move it to your new job?
Not doing the backdoor rIRA then?
I'd rather not leave stuff lying around, I'm a minimalist and I'd prefer to consolidate and have a single place to manage my non-401k investments. I'm also not really familiar with a backdoor Roth IRA. I do have a Roth and I contribute the current $5500 annual max. Although I did just quickly Google what a backdoor Roth IRA is and this new job may put me over the regular Roth IRA contribution income limit (I'm not too far off now and they said their offer could easily blow away my current salary). So I guess I should look into the backdoor method.
There's your answer.
So just to be clear, when I learn about how backdoor Roth IRAs work, you're saying I'll likely see myself better off doing that than rolling the 401k holdings into my current tIRA?

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Help with 401k rollover strategy

Post by PFInterest » Thu Aug 09, 2018 7:29 pm

Calygos wrote:
Thu Aug 09, 2018 7:28 pm
PFInterest wrote:
Thu Aug 09, 2018 7:26 pm
Calygos wrote:
Thu Aug 09, 2018 7:22 pm
PFInterest wrote:
Thu Aug 09, 2018 7:07 pm
Why don't you leave it? Or move it to your new job?
Not doing the backdoor rIRA then?
I'd rather not leave stuff lying around, I'm a minimalist and I'd prefer to consolidate and have a single place to manage my non-401k investments. I'm also not really familiar with a backdoor Roth IRA. I do have a Roth and I contribute the current $5500 annual max. Although I did just quickly Google what a backdoor Roth IRA is and this new job may put me over the regular Roth IRA contribution income limit (I'm not too far off now and they said their offer could easily blow away my current salary). So I guess I should look into the backdoor method.
There's your answer.
So just to be clear, when I learn about how backdoor Roth IRAs work, you're saying I'll likely see myself better off doing that than rolling the 401k holdings into my current tIRA?
Definitely. Look for the prorata rule in the wiki.

Calygos
Posts: 574
Joined: Tue Jan 13, 2015 3:48 pm

Re: Help with 401k rollover strategy

Post by Calygos » Thu Aug 09, 2018 7:36 pm

PFInterest wrote:
Thu Aug 09, 2018 7:29 pm
Calygos wrote:
Thu Aug 09, 2018 7:28 pm
PFInterest wrote:
Thu Aug 09, 2018 7:26 pm
Calygos wrote:
Thu Aug 09, 2018 7:22 pm
PFInterest wrote:
Thu Aug 09, 2018 7:07 pm
Why don't you leave it? Or move it to your new job?
Not doing the backdoor rIRA then?
I'd rather not leave stuff lying around, I'm a minimalist and I'd prefer to consolidate and have a single place to manage my non-401k investments. I'm also not really familiar with a backdoor Roth IRA. I do have a Roth and I contribute the current $5500 annual max. Although I did just quickly Google what a backdoor Roth IRA is and this new job may put me over the regular Roth IRA contribution income limit (I'm not too far off now and they said their offer could easily blow away my current salary). So I guess I should look into the backdoor method.
There's your answer.
So just to be clear, when I learn about how backdoor Roth IRAs work, you're saying I'll likely see myself better off doing that than rolling the 401k holdings into my current tIRA?
Definitely. Look for the prorata rule in the wiki.
Will do. One more question: my current rIRA is 100% VTSAX but only like 17k, not quite 3% of my total portfolio. If I can no longer contribute, should I just leave it completely alone at that point?

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Help with 401k rollover strategy

Post by PFInterest » Thu Aug 09, 2018 7:41 pm

Calygos wrote:
Thu Aug 09, 2018 7:36 pm
PFInterest wrote:
Thu Aug 09, 2018 7:29 pm
Calygos wrote:
Thu Aug 09, 2018 7:28 pm
PFInterest wrote:
Thu Aug 09, 2018 7:26 pm
Calygos wrote:
Thu Aug 09, 2018 7:22 pm


I'd rather not leave stuff lying around, I'm a minimalist and I'd prefer to consolidate and have a single place to manage my non-401k investments. I'm also not really familiar with a backdoor Roth IRA. I do have a Roth and I contribute the current $5500 annual max. Although I did just quickly Google what a backdoor Roth IRA is and this new job may put me over the regular Roth IRA contribution income limit (I'm not too far off now and they said their offer could easily blow away my current salary). So I guess I should look into the backdoor method.
There's your answer.
So just to be clear, when I learn about how backdoor Roth IRAs work, you're saying I'll likely see myself better off doing that than rolling the 401k holdings into my current tIRA?
Definitely. Look for the prorata rule in the wiki.
Will do. One more question: my current rIRA is 100% VTSAX but only like 17k, not quite 3% of my total portfolio. If I can no longer contribute, should I just leave it completely alone at that point?
The point of the backdoor rIRA is to continue contributions.

Calygos
Posts: 574
Joined: Tue Jan 13, 2015 3:48 pm

Re: Help with 401k rollover strategy

Post by Calygos » Thu Aug 09, 2018 7:43 pm

PFInterest wrote:
Thu Aug 09, 2018 7:41 pm
Calygos wrote:
Thu Aug 09, 2018 7:36 pm
PFInterest wrote:
Thu Aug 09, 2018 7:29 pm
Calygos wrote:
Thu Aug 09, 2018 7:28 pm
PFInterest wrote:
Thu Aug 09, 2018 7:26 pm


There's your answer.
So just to be clear, when I learn about how backdoor Roth IRAs work, you're saying I'll likely see myself better off doing that than rolling the 401k holdings into my current tIRA?
Definitely. Look for the prorata rule in the wiki.
Will do. One more question: my current rIRA is 100% VTSAX but only like 17k, not quite 3% of my total portfolio. If I can no longer contribute, should I just leave it completely alone at that point?
The point of the backdoor rIRA is to continue contributions.
Ok, I guess I was assuming it would require a new account. I'm sure it'll all make more sense once I've read up on it. Thank you for the advice!

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: Help with 401k rollover strategy

Post by PFInterest » Thu Aug 09, 2018 7:53 pm

Calygos wrote:
Thu Aug 09, 2018 7:43 pm
PFInterest wrote:
Thu Aug 09, 2018 7:41 pm
Calygos wrote:
Thu Aug 09, 2018 7:36 pm
PFInterest wrote:
Thu Aug 09, 2018 7:29 pm
Calygos wrote:
Thu Aug 09, 2018 7:28 pm


So just to be clear, when I learn about how backdoor Roth IRAs work, you're saying I'll likely see myself better off doing that than rolling the 401k holdings into my current tIRA?
Definitely. Look for the prorata rule in the wiki.
Will do. One more question: my current rIRA is 100% VTSAX but only like 17k, not quite 3% of my total portfolio. If I can no longer contribute, should I just leave it completely alone at that point?
The point of the backdoor rIRA is to continue contributions.
Ok, I guess I was assuming it would require a new account. I'm sure it'll all make more sense once I've read up on it. Thank you for the advice!
Nope it can go in the same or different. Whatever you want.

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