401K rollover options and indecision

[Anonymous]

I am one of those folks who has been recently RIFed. I have kept my former employer's 401K in place just in case I get called back or something dramatic happens from the ongoing litigation.

It's 99.9% certain that there will be no call back in the near future. Now I am having a hard time trying to figure out where to park my 401K since I have a number of options. What would you choose?

A. Keep it where it is since it's still performing well and wait until months (I hope) from now when a new job with a 401K plan is begun, then roll it over into the new company plan?

B. I have an annuity plan with a union that I am still a member of, but am not currently active in, with the same company that currently runs my 401K plan. I could transfer everything into that account, but the number of funds to choose to invest in are very limited in number. It's basically about 10 Vanguard funds with a scant other offerings. However, the company fees of operating the fund are dirt cheap. I'd probably save $1,000's in fees per year. I'm not sure if the limited options make it worth it, tho.

C. Roll it into my inherited Fidelity IRA? I really liked my first couple of years with Fidelity, but my advisors were switched and honestly, even the past advisors that I liked did not have a good pulse on the economy. They thought that inflation would be held in check a couple of years ago. We all know how that turned out. Even still, the account has performed well and has rebounded from its dips. I don't know if that's from them or just the flow of the market. It's a managed account, so the usual fees apply, which run into the thousands.

D. Open a separate IRA run on index funds and don't worry about advice or fees?

E. Break it up and put a little into everything, including my separate Roth IRA?

[Anonymous]

I'd go with A option. I don't see any significant benefits of taking any other options.

[Anonymous]

You don't seem well versed in the difference between your options, so just take your time before you do anything and read and research more. You seem to think where and who you have your money matters vs the underlying investments regardless of institution.

You can't roll your own 401k into an inherited IRA. You probably want option D.

[Anonymous]

Annuities are a combo investment/insurance product. If you think it's "dirt cheap" you need to read the stupid 40 page contact and better understand the garbage you have been sold.

[Anonymous]

Anonymous wrote:Annuities are a combo investment/insurance product. If you think it's "dirt cheap" you need to read the stupid 40 page contact and better understand the garbage you have been sold.

I wasn't sold on it. It's the plan my union signed onto and it's the fourth company they have used for its retirement stewardship, so I can't even remember if it was originally an annuity.

Either way, it's something that is out of my personal control.

[Anonymous]

Anonymous wrote:I am one of those folks who has been recently RIFed. I have kept my former employer's 401K in place just in case I get called back or something dramatic happens from the ongoing litigation.

It's 99.9% certain that there will be no call back in the near future. Now I am having a hard time trying to figure out where to park my 401K since I have a number of options. What would you choose?

A. Keep it where it is since it's still performing well and wait until months (I hope) from now when a new job with a 401K plan is begun, then roll it over into the new company plan?

B. I have an annuity plan with a union that I am still a member of, but am not currently active in, with the same company that currently runs my 401K plan. I could transfer everything into that account, but the number of funds to choose to invest in are very limited in number. It's basically about 10 Vanguard funds with a scant other offerings. However, the company fees of operating the fund are dirt cheap. I'd probably save $1,000's in fees per year. I'm not sure if the limited options make it worth it, tho.

C. Roll it into my inherited Fidelity IRA? I really liked my first couple of years with Fidelity, but my advisors were switched and honestly, even the past advisors that I liked did not have a good pulse on the economy. They thought that inflation would be held in check a couple of years ago. We all know how that turned out. Even still, the account has performed well and has rebounded from its dips. I don't know if that's from them or just the flow of the market. It's a managed account, so the usual fees apply, which run into the thousands.

D. Open a separate IRA run on index funds and don't worry about advice or fees?

E. Break it up and put a little into everything, including my separate Roth IRA?

You CANNOT do option C. You can set up option D and invest it the same way as your inherited Fidelity IRA. You CANNOT mix different types of IRAs.

[Anonymous]

What are the fees in your current 401K. You say "it's still performing well", but this is about the underlying investments, not the 401k itself. You can have the same investments if you set up an IRA...

[Anonymous]

Anonymous wrote:I'd go with A option. I don't see any significant benefits of taking any other options.

Agreed, especially if OP thinks chances are good they will get a job in the next year or 2 where they can rollover the 401k into that plan.

I had a 401k at an old employer I kept open for this reason, but ended up starting a consulting practice, and then a couple of years later that employer closed their 401k and everyone had to find elsewhere to move it, so had to open up a Rollover IRA to move it into. Not the original plan, but worked out fine.

[Anonymous]

Is the new employer 401k a must? Open one I guess, bring the old one over, and leave that lousy account alone.
Roth IRA from now on.

[Anonymous]

Option D. Roll it over, figure out your allocation to one or few broad index funds, and done. Don't pay fees.

[Anonymous]

option A.
keep it in 401k until you have a new 401k to roll it into.
401ks are better than IRAs- more protected.

[Anonymous]

Anonymous wrote:option A.
keep it in 401k until you have a new 401k to roll it into.
401ks are better than IRAs- more protected.

How so?

[Anonymous]

OP, I had a bunch of old 401(k)s from prior jobs and I chose option D. I opened an individual IRA with Fidelity and rolled outside 401(k)s into it. My plan is to do that for any other jobs I might have before retirement. I like Fidelity and like having everything in one place. It was pretty easy, at least on the Fidelity side.

[Anonymous]

Option F, if you can afford it, might be to convert it to a Roth IRA while rolling it over — the tax hit is an issue but if you’re unemployed for some of the year, your overall income is probably lower this year than in years when you’re fully employed. Could save money in taxes down the line.

[Anonymous]

I quit a job in 1996 when younger and all equities. Was not much. I got lazy and never rolled over. That 401k is huge today. Almost 30 years of equity growth. So not like end of world you leave it.