Anonymous
10/17/2024 20:22
Subject: Consolidating 401ks
Anonymous wrote:I need to do this myself. One reason I want to do it sooner than later the person in office next to me died of cancer a few months ago.
His last few months in office I heard him weekly frustrated and stressed as he was rolling 401ks, updating beneficiaries, combining accounts as he knew he was dying in a few months.
Heartbreaking
Anonymous
10/17/2024 11:36
Subject: Consolidating 401ks
Anonymous wrote:Why can’t you convert an IRA to a Roth?
If you have an outstanding pre-tax IRA, doing annual backdoor Roth contributions where you make post-tax contributions to an IRA, become very complicated because of the "pro rata rule". Basically you end up paying tax on a lot of the conversion amount if your old pre-tax IRA is large. This does not apply if you keep those funds in a 401k.
https://support.taxslayer.com/hc/en-us/articles/14776395451021-Pro-Rata-rules-for-Roth-conversions-Backdoor-Roth
Because of this many people who do the annual backdoor Roth move make sure they don't have any funds in any pre-tax traditional IRAs.
Anonymous
10/17/2024 11:03
Subject: Consolidating 401ks
Why can’t you convert an IRA to a Roth?
Anonymous
10/17/2024 10:12
Subject: Re:Consolidating 401ks
Anonymous wrote:Do Not move it into a "current 401k". 401K have limited choices. Move all your old 401K (from companies you no longer work for) into an IRA at Vanguard/TRowe/any low cost mutual fund company. Then you can manage it in one place, with many many more choices for investments.
For ex: my current 401K is with betterment. There are quarterly fees (sure it's only $200-300/ but that is money I wouldn't be paying at vanguard/TRowe) and the investment options are basically "select your percentage for stocks vs Bonds". Betterment is great that it attempts to simplify the process and not scare uneducated people about investing. But Both Vanguard and TRowePrice have way better options for a similar or lower cost.
Basically, you never want to leave your 401K with a company---you will have better choices on your own and easier to manage.
It is true you should consider fees and investment options when deciding what to do with old 401k money but you should also realize that rolling the money into an IRA will make a backdoor Roth essentially not worthwhile/available to you so I’d carefully weigh the pros and cons before doing it.
Anonymous
10/17/2024 10:09
Subject: Re:Consolidating 401ks
Do Not move it into a "current 401k". 401K have limited choices. Move all your old 401K (from companies you no longer work for) into an IRA at Vanguard/TRowe/any low cost mutual fund company. Then you can manage it in one place, with many many more choices for investments.
For ex: my current 401K is with betterment. There are quarterly fees (sure it's only $200-300/ but that is money I wouldn't be paying at vanguard/TRowe) and the investment options are basically "select your percentage for stocks vs Bonds". Betterment is great that it attempts to simplify the process and not scare uneducated people about investing. But Both Vanguard and TRowePrice have way better options for a similar or lower cost.
Basically, you never want to leave your 401K with a company---you will have better choices on your own and easier to manage.
For ex: my current 401K is with betterment. There are quarterly fees (sure it's only $200-300/ but that is money I wouldn't be paying at vanguard/TRowe) and the investment options are basically "select your percentage for stocks vs Bonds". Betterment is great that it attempts to simplify the process and not scare uneducated people about investing. But Both Vanguard and TRowePrice have way better options for a similar or lower cost.
Basically, you never want to leave your 401K with a company---you will have better choices on your own and easier to manage.
Anonymous
10/16/2024 22:19
Subject: Consolidating 401ks
I need to do this myself. One reason I want to do it sooner than later the person in office next to me died of cancer a few months ago.
His last few months in office I heard him weekly frustrated and stressed as he was rolling 401ks, updating beneficiaries, combining accounts as he knew he was dying in a few months.
His last few months in office I heard him weekly frustrated and stressed as he was rolling 401ks, updating beneficiaries, combining accounts as he knew he was dying in a few months.
Anonymous
10/16/2024 22:02
Subject: Re:Consolidating 401ks
Rollover your other accounts into your current 401k. If you open a rollover IRA it will create issues if you want to do a backdoor Roth.
Also, it is much easier to manage your assets allocation in fewer accounts.
Also, it is much easier to manage your assets allocation in fewer accounts.
Anonymous
10/16/2024 18:29
Subject: Consolidating 401ks
Anonymous wrote:NEVER consolidate a premarital 401k (or any other investments). You never know if your DH will have a midlife crisis/affair and want divorce, and try to get your assets.
15 years ago, I never thought it would be me.
Don't all 401k plans track rolled over balances (and associated growth) separately within the current 401K account? Is that not enough separation to show that that account was rolled over from a prior job?
Anonymous
10/16/2024 15:57
Subject: Consolidating 401ks
NEVER consolidate a premarital 401k (or any other investments). You never know if your DH will have a midlife crisis/affair and want divorce, and try to get your assets.
15 years ago, I never thought it would be me.
15 years ago, I never thought it would be me.
Anonymous
10/16/2024 12:12
Subject: Consolidating 401ks
I've been dealing with this in slow motion for the last couple years.
I first opened a rollover IRA with Fidelity. I then transferred my Fidelity 401ks (from multiple employers) into the IRA. Since it was all in Fidelity, this was not too difficult.
I next need to transfer two non-fidelity 401ks into the rollover IRA. I'll try to do at last one of them in the next 6 months.
I first opened a rollover IRA with Fidelity. I then transferred my Fidelity 401ks (from multiple employers) into the IRA. Since it was all in Fidelity, this was not too difficult.
I next need to transfer two non-fidelity 401ks into the rollover IRA. I'll try to do at last one of them in the next 6 months.
Anonymous
10/16/2024 11:12
Subject: Consolidating 401ks
If you leave a company (voluntary or not) in January of the year you turn 55 or later (before 59.5) you can take from the 401k for the company you separate from without penalty. For this reason, I keep my 401k rolled into my current place of employments plans. (Not 55 yet, but to keep it ready in case.) This is a widespread option, but specific to the plan, so check.
It's called "the rule of 55"
It's called "the rule of 55"
Anonymous
10/16/2024 10:54
Subject: Consolidating 401ks
Rollover into current 401k. Much easier to manage.
Anonymous
10/16/2024 10:40
Subject: Consolidating 401ks
I consolidated every this year except TIAA which has been a kafkaesque nightmare to get my money out (they are truly the worst). It’s nice to see it all together and balance portfolios etc and less for spouse to keep track off, beneficiaries, putting into trust etc should I kick the bucket .
Anonymous
10/16/2024 10:10
Subject: Consolidating 401ks
I would consolidate them into your current 401k. It is helpful to not lose track of the accounts, avoid any fees you might be paying on the old accounts, simplify RMDs when the time comes (you otherwise have to take an RMD from each account). Rolling them into an IRA complicates roth conversions if you want to do that.
Anonymous
10/16/2024 08:24
Subject: Consolidating 401ks
Spouse and I each have 3 401ks from former employers between us separate from our current 401ks. What is recommended to consolidate these? Is it best to try to move into current 401k? Offhand I think the accounts are with Merrill Lynch, Fidelity and not sure about the 3rd. Current 401ks are with T.Rowe and some other bank I never heard of.
Besides tracking, is there a benefit for consolidating? I think they each have $100 to $300k in them.
TIA
Besides tracking, is there a benefit for consolidating? I think they each have $100 to $300k in them.
TIA