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401-k Question: Wife’s employer was bought out and they will have a new 401-k provider.
Posted on 4/3/24 at 11:46 am
Posted on 4/3/24 at 11:46 am
Current 401-k is Voya and the new one is administered by Fidelity. She also has an IRA with Vanguard. Is there generally a preference/advantage between rolling the Voya 401-k into the Fidelity 401-k or rolling it into the Vanguard IRA?
This post was edited on 4/3/24 at 11:47 am
2
Posted on 4/3/24 at 11:48 am to auwaterfowler
"In general..."
In general, rolling into an IRA will provide much greater investment opportunity and more control. This can increase the chances of seeing higher gains. Downsides might be fees if you are paying any fees on the IRA. There are IRA options that are free, though, if needed.
Rolling into a different 401k will limit investment options to only what the new 401k offers. The potential upside is typically current employer 401k accounts have very low costs or are free.
In general, rolling into an IRA will provide much greater investment opportunity and more control. This can increase the chances of seeing higher gains. Downsides might be fees if you are paying any fees on the IRA. There are IRA options that are free, though, if needed.
Rolling into a different 401k will limit investment options to only what the new 401k offers. The potential upside is typically current employer 401k accounts have very low costs or are free.
Posted on 4/3/24 at 2:37 pm to auwaterfowler
If you rollover traditional 401k to traditional IRA you won't be able to fund backdoor Roth without paying taxes.
If you consolidate old/new 401k could have larger balance to access early penalty free using Rule of 55.
401k loan access
If none of those are important to you, IRA would provide more choice and potentially lower fees.
Otherwise, IRA rollover will generally give more investment choices w lower fees/expense ratios.
If you consolidate old/new 401k could have larger balance to access early penalty free using Rule of 55.
401k loan access
If none of those are important to you, IRA would provide more choice and potentially lower fees.
Otherwise, IRA rollover will generally give more investment choices w lower fees/expense ratios.
This post was edited on 4/3/24 at 2:38 pm
Posted on 4/3/24 at 4:16 pm to TorchtheFlyingTiger
Was not even aware of the Rule of 55. Thanks! Since she plans to retire within 2 years (current age is 51), I will likely have her roll it into the new 401k. Gives us more flexibility.
This post was edited on 4/3/24 at 4:18 pm
Posted on 4/3/24 at 4:26 pm to auwaterfowler
Rule of 55 only works if she waits a bit longer, year she turns 55, to leave employer. Also, confirm the 401k plan allows Rule of 55 withdrawals apparently some dont.
I forgot to mention 401k has better protection against judgement/creditors depending on state.
I forgot to mention 401k has better protection against judgement/creditors depending on state.
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