approximately 1% in fees in my current employer Roth401k account on top of the ER of the index funds I’m invested in. Subsequently, the more my Roth 401k grows, the more I’m paying in fees.

Is there typically a rule that would prevent me from rolling this active account into a personal Roth IRA periodically (quarterly) to lessen the impact of fees?

I would also benefit from a wider selection of funds in my Roth IRA through Vanguard

What are the negatives to this approach? Is this a common practice?

This post was edited on 7/27/18 at 7:54 am

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Posted by baldona

Florida

Member since Feb 2016

20447 posts

Posted on 7/27/18 at 6:50 am to Books

I don't think that while you are still actively employed you can roll it outside of your employer's plan. But that's just off hand information, so I may be wrong.

You'd have to wait until you changed jobs I mean.

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Posted by castorinho

13623 posts

Member since Nov 2010

82026 posts

Posted on 7/27/18 at 7:45 am to baldona

quote:
I don't think that while you are still actively employed you can roll it outside of your employer's plan. But that's just off hand information, so I may be wrong.

You'd have to wait until you changed jobs I mean.

some plans allow it, actually.

quote:
What are the negatives to this approach? Is this a common practice?

yes it's common. Some cons are 401k loans wouldn't be available to you (obviously, but that's not recommended anyway), and some plans suspend contributions for a period of time after a rollover like that (so make sure), also being able to withdraw tax free at 55 if in active employer 401k vs 59 1/2 in ira. Pros, better control andore diversification

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