re: What to do with 2 Old 401K accounts from previous employers

quote:

---

Just don’t buy $250k worth of AUPH options. Very hard lesson I’ve learned.

---

Not to rub salt in the wound, but unless a person is a multi million dollar professional trader (who stays glued to a Level 2 screen all day), it would probably be unwise to buy $250K of any equity or index option.

Just roll them into a Roth or Traditional IRA with fidelity (which one is best for you really depends on your income and if you think you'll be in a higer or lower tax bracket when you retire). Then, if you still have like 20 years to retire invest it in FXAIX which is Fidelity's S&P 500 index fund.

When you get closer to retirement, like 10-15 years, you'll want to start diversifying it more into more Bonds, Cds, ect and less stock. But would be best to use an advisor or do more research then. But until then that's what going to be best for you and that's what everyone on here is gonna tell you to do. Or stick it in VOO which almost the same thing, but is an ETF S&P 500 follower.

If you don't have a 401k with your new employer, you're probably going to want to start an IRA anyway to contribute to.

Some terrible responses to your post. With the info you gave, it is impossible to give good advice. Are you comfortable with what your money is invested in today? What fees are being charged on your accounts? Doing nothing might be just fine. The guy saying he has been working in finance for 30 years and is telling you what to do based on the little info you gave is a joke! He says 1% is standard. Well that is for advisors, but the majority of my 401k is at my previous employer and in low cost indexes charging me 10 times less than that.

You need to provide more info to get good advice. Your income level plays a part on whether to goth Roth or traditional IRA, but you should continue saving for retirement with one of the other on your own since your employer doesn't offer anything. Consolidating your 2 accounts might make since if your balances are small due to many plans charging you a small annual fee because you no longer work there.

quote:

---

One account has about 190k and the other about 100k. I'm 16 years out on retirement and in the 22% tax bracket if that helps any.

---

If you're in 22 now, do you think you'll most likely be in a lower one when you retire and be drawing less money out to live on than you do now (not considering inflation) or in a higher one?

If higher, you'd want to lean towards a roth.
A good time to do a roth for example is when you are young and are in a very low tacket bracket.
You can put it in then after its been taxed at that very low rate, but draw it in retirement and it will have already been taxed.


If lower, then you'd want to lean towards traditional.
Traditonal is usually better if you think youll be in a lower bracket than you are now and drawing less to live on when you retire than you do now. That money goes in before being taxed and doesn't get taxed until you withdraw it. Kind of anyway... you'll put it in after tax, but report on your taxes that you contributed x amount to a traditional IRA for the past year and the taxes on that amount will be returned to you/deducted from what you owe. Then they will tax it when you withdraw it in retirement.

If I had to guess based on what you said, I would think you'd want to go traditional.

Once you roll it in to the IRA ( I would do fidelity personally especially since you already have an account with them - I use them and really like them, they also have great customer service and will advise you if you like) then you'll need to invest it and set it up to reinvest the gains and dividends. A S&P follower like FXAIX or VOO would mostly likely still be good for you now. It would be good enough for a while for sure until you have more time to do some more research or get with in advisor in a year or so. Both of those have very low expense ratio fees and fidelity has no trading fees that it charges for investing it those.

You can roll both of those into one traditional Ira with fidelity (no limits for rolling) and then contribute to it yearly every year going forward (but there is a limit to that amount-7000 this year for 49 and younger, 8000 for 50 and older). If you're married, your wife can also have her own IRA and you can help her contribute to hers if needed. So together if under 50 you could pack away 14k a year together. Those limits usually go up about 500 every year. So next year it will probably be 7500.

Hope that helps, with your new job not having a 401k you probably need to really be thinking about an IRA and learning about using it (at least for future contributions even if you don't roll over your 401ks).

You're only including the Expense Ratio which is .15%.
Now add in the Record Keeping fee of .58% and then the Advisor Fee of .30%.

Now you're at .895% . Very close to 1%, which I said was pretty standard across the board.