401(k) rollover options

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Topic Author
SpaceX
Posts: 38
Joined: Sat May 30, 2020 11:54 pm
Location: FL

401(k) rollover options

Post by SpaceX »

After the merger of our company with another, I'd like to determine what my options are regarding my current 401(k). The new company uses Voya Financial, and the mutual funds offered are limited to a few index funds thru Fidelity (the S&P 500 index, small cap index, midcap index, US bond index, Global Ex US Index) as well as a handful of Age specific BlackRock LifePATH Index G series funds. The new 401(k) will offer 100% matching up to the first 6% contributed without definite plans for profit sharing. I am unsure yet of the management fees. Our current 401(k) plan did offer profit sharing and the administration costs were only 50 basis points. There were a few more mutual funds to pick from including sector specific funds which I liked as well.

My current 401(k) portfolio ($2.4M) comprises approximately 60% of our entire retirement portfolio ($4M) which includes my old 403(b) from a previous employer as well as a Traditional and Roth IRA. My wife has both a Traditional and Roth IRA as well. I am officially 59 1/2 years old, my wife 55, currently living in the state of FL in the highest federal tax bracket. We have plenty of money in our taxable accounts to live quite comfortably, with no debt but plans to retire in 4 -5 years. I've always contributed the maximal allowed amounts to the 401(k) and have no plans of early withdrawal.

My questions:
1. If the plan allows, should I do a indirect rollover to a self-directed IRA at Schwab, Vanguard, or Fidelity where my options of investments are more broad and would allow me to invest in other mutual funds of my choosing that would give me a more diversified portfolio...or
2. Shall I keep things simple and do a direct rollover into the new 401(k) using 3 or 4 of the Fidelity Index funds offered?

3. Has anyone had any experience with Voya Financial as a company retirement plan administrator?

I appreciate any insights or advice from this very thoughtful and engaging community.

Thank you and happy investing!!
intendi
Posts: 261
Joined: Sat Oct 17, 2020 10:16 am

Re: 401(k) rollover options

Post by intendi »

If the fees (edit: new vs. old 401k plan) are the same or better, I'd move it to the new 401k plan rather than an IRA (if I were in your shoes). Simplicity and ERISA asset protection are the two things I'd consider beneficial.

Do you have the option of keeping the current 401k plan open?
exodusNH
Posts: 11479
Joined: Wed Jan 06, 2021 7:21 pm

Re: 401(k) rollover options

Post by exodusNH »

SpaceX wrote: Fri Nov 29, 2024 3:17 pm After the merger of our company with another, I'd like to determine what my options are regarding my current 401(k). The new company uses Voya Financial, and the mutual funds offered are limited to a few index funds thru Fidelity (the S&P 500 index, small cap index, midcap index, US bond index, Global Ex US Index) as well as a handful of Age specific BlackRock LifePATH Index G series funds. The new 401(k) will offer 100% matching up to the first 6% contributed without definite plans for profit sharing. I am unsure yet of the management fees. Our current 401(k) plan did offer profit sharing and the administration costs were only 50 basis points. There were a few more mutual funds to pick from including sector specific funds which I liked as well.

My current 401(k) portfolio ($2.4M) comprises approximately 60% of our entire retirement portfolio ($4M) which includes my old 403(b) from a previous employer as well as a Traditional and Roth IRA. My wife has both a Traditional and Roth IRA as well. I am officially 59 1/2 years old, my wife 55, currently living in the state of FL in the highest federal tax bracket. We have plenty of money in our taxable accounts to live quite comfortably, with no debt but plans to retire in 4 -5 years. I've always contributed the maximal allowed amounts to the 401(k) and have no plans of early withdrawal.

My questions:
1. If the plan allows, should I do a indirect rollover to a self-directed IRA at Schwab, Vanguard, or Fidelity where my options of investments are more broad and would allow me to invest in other mutual funds of my choosing that would give me a more diversified portfolio...or
2. Shall I keep things simple and do a direct rollover into the new 401(k) using 3 or 4 of the Fidelity Index funds offered?

3. Has anyone had any experience with Voya Financial as a company retirement plan administrator?

I appreciate any insights or advice from this very thoughtful and engaging community.

Thank you and happy investing!!
You may have no choice as to what happens.

A 401k is a trust run by your employer for your benefit. Depending on the terms of the merger and the terms of your existing 401k, the 401k may be absorbed into the new company without an option to roll it out, unless, of course, you're laid off as part of the merger.
Topic Author
SpaceX
Posts: 38
Joined: Sat May 30, 2020 11:54 pm
Location: FL

Re: 401(k) rollover options

Post by SpaceX »

intendi wrote: Fri Nov 29, 2024 3:46 pm If the fees (edit: new vs. old 401k plan) are the same or better, I'd move it to the new 401k plan rather than an IRA (if I were in your shoes). Simplicity and ERISA asset protection are the two things I'd consider beneficial.

Do you have the option of keeping the current 401k plan open?
Unfortunately this plan closes.
Topic Author
SpaceX
Posts: 38
Joined: Sat May 30, 2020 11:54 pm
Location: FL

Re: 401(k) rollover options

Post by SpaceX »

exodusNH wrote: Fri Nov 29, 2024 4:04 pm
SpaceX wrote: Fri Nov 29, 2024 3:17 pm After the merger of our company with another, I'd like to determine what my options are regarding my current 401(k). The new company uses Voya Financial, and the mutual funds offered are limited to a few index funds thru Fidelity (the S&P 500 index, small cap index, midcap index, US bond index, Global Ex US Index) as well as a handful of Age specific BlackRock LifePATH Index G series funds. The new 401(k) will offer 100% matching up to the first 6% contributed without definite plans for profit sharing. I am unsure yet of the management fees. Our current 401(k) plan did offer profit sharing and the administration costs were only 50 basis points. There were a few more mutual funds to pick from including sector specific funds which I liked as well.

My current 401(k) portfolio ($2.4M) comprises approximately 60% of our entire retirement portfolio ($4M) which includes my old 403(b) from a previous employer as well as a Traditional and Roth IRA. My wife has both a Traditional and Roth IRA as well. I am officially 59 1/2 years old, my wife 55, currently living in the state of FL in the highest federal tax bracket. We have plenty of money in our taxable accounts to live quite comfortably, with no debt but plans to retire in 4 -5 years. I've always contributed the maximal allowed amounts to the 401(k) and have no plans of early withdrawal.

My questions:
1. If the plan allows, should I do a indirect rollover to a self-directed IRA at Schwab, Vanguard, or Fidelity where my options of investments are more broad and would allow me to invest in other mutual funds of my choosing that would give me a more diversified portfolio...or
2. Shall I keep things simple and do a direct rollover into the new 401(k) using 3 or 4 of the Fidelity Index funds offered?

3. Has anyone had any experience with Voya Financial as a company retirement plan administrator?

I appreciate any insights or advice from this very thoughtful and engaging community.

Thank you and happy investing!!
You may have no choice as to what happens.

A 401k is a trust run by your employer for your benefit. Depending on the terms of the merger and the terms of your existing 401k, the 401k may be absorbed into the new company without an option to roll it out, unless, of course, you're laid off as part of the merger.
Understood. I certainly hope that the management fees with the new administrator are low.
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