New Job, New 401K Offerings

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New Job, New 401K Offerings

Post by randy1k4 »

Hi folks,

My previous job only offered funds from American Funds, which are all actively-managed funds. I picked the one with the lowest expense ratio, but even then, the fund (RGABX) has an expense ratio of 1.40%.

My new job offers VFIAX, with an expense ratio of (0.04%), and I'd like to move my money from the old 401K account to the new 401K account. I've done this before a long time ago, and I remember that it was a pain in the kneck because some things were not done correctly.

This should be simple, but I was wondering if someone could help me figure out what steps I need to take to move the money without incurring any penalties or headaches. Thank you.
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Re: New Job, New 401K Offerings

Post by drizzle »

That sounds like a great new 401k. I rolled my 401k recently, each provider is different. There may be an unavoidable fee for rolling money OUT of your current 401k, but it's definitely worth it based on what you're sharing.

You can either roll your old 401k to your new provider or to a Rollover IRA at wherever you want.
Both are viable options.
It's pretty smooth for most transactions, they have departments on both the receiving and sending side to help, but the money does disappear for a bit while a paper check is sent. That part was a bit anxiety producing.

Good luck!
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Re: New Job, New 401K Offerings

Post by Nyc10036 »

From my experience not all 401Ks accept rollovers from another 401K.

If your new 401K does not accept rollovers, you will need to rollover to an IRA.

In the past, I have had a check be mailed to me although not always. This was nervewrecking in the past and would be even more so these days.
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Re: New Job, New 401K Offerings

Post by Beachey »

My biggest issue with any type of rollover is time out of the market. As to the reliability of mail, they usually give you an option that is not USPS for a fee, depending on the amount of the account it likely is a good idea.

Once you confirm with the new 401k it will accept a rollover, you normally initiate it with the old 401k. And while I prefer doing things online, from my last job the online rollover was not real clear and so they ended up sending me the value of the account on the day I initiated it leaving a small amount from the change in value in the time it took to process. I had to do an additional rollover to close the account. The lesson learned is talking to a human is usually the better option.
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