Changing Jobs - What do you do with your 401k?

[zhenya]

It seems like you are still considering rolling your old 401k into a new 401k. I don't understand what benefit you think you will gain from that. All I see are negatives.

I mentioned two pretty big potential advantages in my post. My wife’s university plan has significantly better options than we can get on the open market - lower costs even for things like Vanguard Index funds through their institutional shares, and access to products like TIAA Traditional in flavors that are otherwise unavailable. Perhaps even more importantly is the potential loss of access to contribute to a Roth IRA if you do or will exceed the income limits for direct contributions. The loss of up to $11k/year of tax-advantaged Roth space for a married couple is a big deal.

 

[puma1552]

As an update, I am in the process of rolling my old Roth 401k into traditional/Roth IRAs at Vanguard (Roth portion of 401k going to Roth IRA, traditional portion going to traditional IRA of course). Checks are in the mail to be delivered to Vanguard on Monday, and with 4 days of processing time it looks like I am just barely going to get this rollover completed by the end of 2018, so that's good. Since the money initially goes into a prime money market account at Vanguard, from where you then actually buy funds, I called Vanguard and asked if the rollover is considered complete as soon as the money hits that initial prime money market account or if it isn't complete until you've moved it from the prime money market account into an actual fund and he said it's complete as soon as the money hits the prime money market account, thankfully; so should have no problem completing this in 2018 for tax reporting purposes.

 

[JoeInMilwaukee]

Thanks for the update! The money market accounts are what Vanguard refers to as your "settlement accounts."

I just happen to be in the process or transferring a Roth IRA from another financial institution to a Vanguard Roth IRA. The transfer will be complete when the funds have transferred into the Vanguard Roth IRA settlement account. At that point I can decide if I want to buy other mutual funds or leave some or all of it in the settlement account.

 

[puma1552]

The money was deposited/cleared yesterday and I went ahead and processed a transaction to move the money into a Target Retirement fund.

I have to say, I'm pretty lucky that money was out of the market this past week.

 

[JoeInMilwaukee]

I have to say, I'm pretty lucky that money was out of the market this past week.

Indeed! Perfect timing on your part!

 

[MileHighPilot]

I would take your old 401k and roll it out to an IRA.

that would be my recommendation as well

With my Roth 401k, matching employer contributions go in as Traditional 401k contributions (I'm assuming this is a Federal law).

that is how my employer works as well but i am not sure if it is a federal law or not

 

[ejb190]

that is how my employer works as well but i am not sure if it is a federal law or not

Yup. That's Federal Law.

 

[MileHighPilot]

Yup. That's Federal Law.

thanks i actually didnt know that
i exceed the limits on my roth 401k every year anyway so it wouldnt make a difference if my employer contributed to my roth 401k or traditional 401k