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Started By
Message
Rolling over 401K to new job
Posted on 12/17/14 at 1:24 pm
Posted on 12/17/14 at 1:24 pm
I am looking at starting a new job at the beginning of the year. Currently I have a 401k with a company match. The new company does not let you participate in the 401k until after the first year.
Question 1:
What do I do with the current 401k I have? What do I pay in to for next year? I have never gone through this before.
Question 2:
Their match says "company match of 50% up to $4000 contribution to employee". Not quite sure about this wording.
Need a little help here. Still early in my career and I want to make sure I am setting myself up correctly.
Question 1:
What do I do with the current 401k I have? What do I pay in to for next year? I have never gone through this before.
Question 2:
Their match says "company match of 50% up to $4000 contribution to employee". Not quite sure about this wording.
Need a little help here. Still early in my career and I want to make sure I am setting myself up correctly.
4
Posted on 12/17/14 at 1:26 pm to Phil
quote:
What do I do with the current 401k I have? What do I pay in to for next year? I have never gone through this before.
roll into an IRA
quote:
Their match says "company match of 50% up to $4000 contribution to employee". Not quite sure about this wording.
it means they will match 50% of what you will put it (like if you put in 8%, they will match it with 4%) up to $4000 for the year
This post was edited on 12/17/14 at 1:27 pm
Posted on 12/17/14 at 1:30 pm to Phil
quote:
What do I do with the current 401k I have?
I believe you could roll it into a Roth IRA. If you can, you can contribute to that in the year before your new job lets you participate. After you start your contributions in your new job's 401k, it is still probably a good idea to continue to contribute whatever you can to the Roth.
quote:
"company match of 50% up to $4000 contribution to employee".
If you put $8,000 in, they will pay half, or $4,000. If you put $10,000 in, your company will still put $4,000 in.
At least that's how I read it.
Posted on 12/17/14 at 1:32 pm to Salmon
Thanks. As for the IRA do I just go through Vanguard? Is there a particular one that is better than others? I am going to research tonight, just wanted to get some initial help here.
Posted on 12/17/14 at 1:47 pm to Phil
quote:
Thanks. As for the IRA do I just go through Vanguard? Is there a particular one that is better than others? I am going to research tonight, just wanted to get some initial help here
Vanguard is a good one. Take a look at a few sites for the online brokers and go with the one with the features you want. You will have a lot more investment options than with your 401k, and each broker has its strengths and drawbacks.
You can roll your 401k into a regular or roth IRA. If you do Roth, you pay taxes on the rollover, but it would grow tax free. May be worth it depending on your age, income level. See LINK for more info
Posted on 12/17/14 at 3:56 pm to OnTheBrink
I didn't read it that way.
I think it's if you put in 8k, they will put in 4k.
I think it's if you put in 8k, they will put in 4k.
Posted on 12/17/14 at 4:09 pm to TheHiddenFlask
I think y'all said the same thing.
The max the company will put into your 401K each year is $4000. If you put in $2000, they will put in $1000. If you put in $12000, they will put in $4000. They match 50% of your contribution until that 50% would exceed $4000 and then they stop contributing.
The max the company will put into your 401K each year is $4000. If you put in $2000, they will put in $1000. If you put in $12000, they will put in $4000. They match 50% of your contribution until that 50% would exceed $4000 and then they stop contributing.
Posted on 12/17/14 at 4:34 pm to GoCrazyAuburn
Why not roll it into your new company's 401k? 
Posted on 12/17/14 at 4:46 pm to Phil
1. roll it into the new employer's IRA
or
2.roll it into a Roll Over IRA
or
3. Leave it where it is
or
2.roll it into a Roll Over IRA
or
3. Leave it where it is
Posted on 12/17/14 at 4:59 pm to agdoctor
You people are financial dolts. If he rolls it into the new company plan he's now stuck with likely one set of funds. Whereas if he rolls it into an IRA anywhere (NOT ROTH) he can buy bonds, funds, money market, stocks, whatever. If he rolls into a Roth he pays tax on the entire amount. Not an ideal scenario either.
Posted on 12/17/14 at 5:00 pm to lynxcat
401k loans are nice to have in a pinch. Roll your old money into your new 401k plan (provided there are decent funds to choose from) and you have a larger chunk to potentially draw from.
Posted on 12/17/14 at 5:01 pm to Broke
quote:
Broke
Many 401k plans (including mine) have access to all those things you mentioned.
ETA: Ever looked at a Roth balance vs a traditional IRA balance after 20-30 yrs? If so you wouldn't be calling people idiots. If you've got the cash to pay the taxes it's a great move.
This post was edited on 12/17/14 at 5:05 pm
Posted on 12/17/14 at 5:04 pm to Sigma
quote:
Many 401k plans (including mine) have access to all those things you mentioned.
No they don't. You're a liar. I've never seen one company plan that will let me invest into 20 different equities of my choice.
Posted on 12/17/14 at 5:07 pm to Broke
I would post a screen shot of my options from my current and previous employers, but....
Sure, maybe you are forced to buy a Schwab 500 Index fund when you'd rather buy Vanguard's, but there's no real difference between the two.
Sure, maybe you are forced to buy a Schwab 500 Index fund when you'd rather buy Vanguard's, but there's no real difference between the two.
Posted on 12/17/14 at 5:07 pm to Sigma
quote:
ETA: Ever looked at a Roth balance vs a traditional IRA balance after 20-30 yrs?
Of course I have. I've been doing this for a living for 20 years. And fyi, the balances are exactly the same. Taxability is another matter entirely.
Posted on 12/17/14 at 5:08 pm to Sigma
quote:
I would post a screen shot of my options from my current and previous employers, but....
I'll wait. I'll also wait on you to report back the other "Many" companies that offer this.
Posted on 12/17/14 at 5:08 pm to Broke
Taxes are a huge part of the decision. Why would you ignore them?
Posted on 12/17/14 at 5:10 pm to Sigma
quote:
Taxes are a huge part of the decision. Why would you ignore them?
I didn't ignore them. All you talked about was the balance. You are giving him half arse advice.
Did you ask him how old he was? His tax bracket? Married or single? Any other debts? Of course not.
Posted on 12/17/14 at 5:12 pm to Broke
quote:
I'll wait. I'll also wait on you to report back the other "Many" companies that offer this.
I've had two employers and both have offered a fairly wide range of both index and managed funds, bond funds, MM funds, and a option to purchase stock.
"Many" may be an overstatement, but I'm sure they are fairly common. For the OP's decision, as I stated earlier, he should make sure he has good investment options first.
Posted on 12/17/14 at 5:12 pm to Broke
quote:
Of course I have. I've been doing this for a living for 20 years. And fyi, the balances are exactly the same. Taxability is another matter entirely
i think it behooves most people in the long run to pay the tax and roll it to a roth, absent special circumstances. and i agree with Broke about converting to IRA. If he converts to roth ira, he could pull his deposit out anytime without penalty. IRA definitely offers more flexibility than any 401k plan i've ever seen. add to that the ability to invest in low fee ETF's, as opposed to mutual funds, and you save thousands over your lifetime in fees. it really is a no-brainer imo. i would only use 401k to get match and if you've maxed out roth.
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