Roll law firm 401k into fed TSP?

[Anonymous]

PP here. also, if it were me I would roll into a vanguard IRA. lowest fees around.

[Anonymous]

Anonymous wrote:1. it doesn't matter if the law firm goes under. that money will not be affected by that.

2. you will not incur any tax penalties if you roll over your 401k balance into an IRA.

3. I may be wrong about this, but I don't think you can do a backdoor roth conversion if you roll the balance into an IRA. I think you would incur tax penalties because of the amount. (again, I could be wrong about this.)

#1 isn't true. Did you read about the Dewey bankruptcy at all? Read the second page here: http://abovethelaw.com/2012/07/what-dewey-do-with-thousands-of-boxes-of-client-files-and-bad-news-for-dl-401k-participants-em/2/

Maybe you shouldn't open your mouth if you don't know what you're talking about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:1. it doesn't matter if the law firm goes under. that money will not be affected by that.

2. you will not incur any tax penalties if you roll over your 401k balance into an IRA.

3. I may be wrong about this, but I don't think you can do a backdoor roth conversion if you roll the balance into an IRA. I think you would incur tax penalties because of the amount. (again, I could be wrong about this.)

#1 isn't true. Did you read about the Dewey bankruptcy at all? Read the second page here: http://abovethelaw.com/2012/07/what-dewey-do-with-thousands-of-boxes-of-client-files-and-bad-news-for-dl-401k-participants-em/2/

Maybe you shouldn't open your mouth if you don't know what you're talking about.

I don't know for sure but my guess is he/she probably didn't open his/her mouth while he/she was typing. But I maybe wrong. Sorry... Slow afternoon.

[Anonymous]

Anonymous wrote:

Anonymous wrote:1. it doesn't matter if the law firm goes under. that money will not be affected by that.

2. you will not incur any tax penalties if you roll over your 401k balance into an IRA.

3. I may be wrong about this, but I don't think you can do a backdoor roth conversion if you roll the balance into an IRA. I think you would incur tax penalties because of the amount. (again, I could be wrong about this.)

#1 isn't true. Did you read about the Dewey bankruptcy at all? Read the second page here: http://abovethelaw.com/2012/07/what-dewey-do-with-thousands-of-boxes-of-client-files-and-bad-news-for-dl-401k-participants-em/2/

Maybe you shouldn't open your mouth if you don't know what you're talking about.

good point. even though OP asked whether his/her money would be "safe" (ie, will i lose everything if the firm sinks), i guess i should have taken into account that if the firm goes into bankruptcy and asks the bankruptcy court and the IRS to approve a small fee against all participants, and both the court and the IRS approve the fee, then there could be a 1-2% fee levied against his/her account. i am an IDIOT who has no idea what he's talking about. i will stop opening my mouth. or typing, or whatever.

[Anonymous]

Anonymous wrote:Thanks for all the helpful input. I think I will probably end up rolling into the fed TSP, but will take a closer look at IRA options before I do so.

Fidelity has some very good low fee index funds, but I don't want to leave my money in an account associated with my former law firm. You never know!

If your happy with Fidelity you could even rollover to them.

[Anonymous]

Anonymous wrote:PP here. also, if it were me I would roll into a vanguard IRA. lowest fees around.

Not lower than TSP.

You will preserve your eligibility for a backdoor Roth IRA if you either rollover the funds to TSP or leave them in the 401k.

I would roll over to TSP, but it depends a little on how committed you are to a low fee/index approach (I think it's the right way to go FWIW).

[Anonymous]

OP here -- thanks all. I should have clarified I was just concerned about having my 401k tied up in bankruptcy court, and possibly having to pay fees. In any case, I don't want to risk it.

I think the low fee approach is best for the long run -- here TSP has the edge -- but private sector offerings at Fidelity and Vanguard are nice for the sheer variety of available options -- eg, REITs and high yield bond funds. I have a smattering of those in my account now, though I mostly have broad based stock index funds.

Anyway, will take a closer look. Thanks again.

[Anonymous]

Does the TSP have good index fund options? Those really are your best bet. I do have some money in Vanguard sector funds, but just for shits and giggles. The core of my money is in their broad index funds, because I think you are hard pressed to beat those.

[Anonymous]

Anonymous wrote:Does the TSP have good index fund options? Those really are your best bet. I do have some money in Vanguard sector funds, but just for shits and giggles. The core of my money is in their broad index funds, because I think you are hard pressed to beat those.

go to tsp.gov and check it out.