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Message
Rolling over a 401 K
Posted on 4/4/23 at 7:09 pm
Posted on 4/4/23 at 7:09 pm
I’ve got around $60K in a 401K through my old employer that I will have to move soon. Can I roll this into something that will give me more freedom in investments (individual stocks, other etf’s, etc). I could roll it into my new employer’s retirement, which is handled by vanguard, but I’d like to be able to have flexible options if there is a possibility. Forgive me if this is a stupid question, I really just don’t know too much about these things. Thanks in advance
4
Posted on 4/4/23 at 7:18 pm to adavis
A direct rollover into a Rollover IRA at most any brokerage would give you the flexibility that you’re mentioning. Schwab, Fidelity, Vanguard, etc… any of the majors are good options.
Posted on 4/4/23 at 7:28 pm to adavis
You probably can buy whatever is in your new 401k in a rollover
I like freedom of rollover
The target fund will probably beat my rollover performance though
I like freedom of rollover
The target fund will probably beat my rollover performance though
Posted on 4/4/23 at 7:40 pm to adavis
I’ve got one from an old company I worked for just sitting there with about $150k in it. I’ve been maxing my 401k/Roth/HSA for 12 years with my current company. I’m considering saying screw it and just cashing out the old IRA and paying the 10% penalty. Figure what the hell especially with all the uncertainty we are dealing with now.
Posted on 4/4/23 at 8:01 pm to ronricks
quote:
considering saying screw it and just cashing out the old IRA and paying the 10% penalty. Figure what the hell especially with all the uncertainty we are dealing with now.
And do what with it? Just reallocate if need be but why realize tax and penalty when you could just stay in the IRA unless in dire need of cash?
This post was edited on 4/4/23 at 8:02 pm
Posted on 4/4/23 at 8:19 pm to TorchtheFlyingTiger
quote:
And do what with it?
Not sure yet. Don’t really need it but would be nice to have in cash for whatever. . I wouldn’t dare even consider this if I didn’t already max out everything now. Still pondering what to do. You can only save so much money.
Posted on 4/4/23 at 8:21 pm to adavis
Rollover could be a good idea but first consider:
1. Do you anticipate being over income limit for Roth IRA in future and desire to do a backdoor Roth (If so having a rollover traditional IRA will be an issue due to pro rata rule)
2. Any likelihood you may retire from new job between 55 and 59.5? If so, you may want to move it to new 401k instead to have early access under rule of 55.
3. If there's a chance you may need to take a 401k loan before new 401k balance is large enough, you might want to move balance to new 401k.
If employer plan allows rollover from IRA you can move it later for any of above reasons.
1. Do you anticipate being over income limit for Roth IRA in future and desire to do a backdoor Roth (If so having a rollover traditional IRA will be an issue due to pro rata rule)
2. Any likelihood you may retire from new job between 55 and 59.5? If so, you may want to move it to new 401k instead to have early access under rule of 55.
3. If there's a chance you may need to take a 401k loan before new 401k balance is large enough, you might want to move balance to new 401k.
If employer plan allows rollover from IRA you can move it later for any of above reasons.
Posted on 4/4/23 at 8:32 pm to TorchtheFlyingTiger
I think I’ll stay below the income limit to contribute to a Roth. Isn’t it around 220k or so if you’re married? I plan on working until I’m 60 and I shouldn’t. We’d to take out any kind of 401 k loan
Posted on 4/4/23 at 9:20 pm to ronricks
quote:
Not sure yet. Don’t really need it but would be nice to have in cash for whatever. . I wouldn’t dare even consider this if I didn’t already max out everything now. Still pondering what to do. You can only save so much money.
No one who saves every possible penny pre tax would ever cash out a 401k and pay the 10% penalty just because. I reject your premise.
Posted on 4/4/23 at 9:36 pm to ronricks
quote:
Figure what the hell especially with all the uncertainty we are dealing with now.
There’s been uncertainty ever since Eve convinced Adam that taking a bite of that apple was a good idea.
Remember what this fellow had to say about when people get caught up in the belief that they’re living in unique times:
quote:
"Every generation's memory is exactly as long as its own experience." --John Kenneth Galbraith
Posted on 4/5/23 at 4:23 am to slackster
quote:
No one who saves every possible penny pre tax would ever cash out a 401k and pay the 10% penalty just because. I reject your premise.
Well you’d be wrong. I have no debt and max all my retirement accounts and have been ever since I started working. I am 43. As I said you can only save so much money. It’s perfectly ok to live a little. Do the math. How am I going to miss this measly what will end up being like $90k? It’s nothing compared to what I have in my other retirement accounts. It’s not like I have no savings a ton of debt a 600 credit score and am not currently saving for retirement
Posted on 4/5/23 at 7:43 am to ronricks
quote:
I’m considering saying screw it and just cashing out the old IRA and paying the 10% penalty. Figure what the hell especially with all the uncertainty we are dealing with now.
No!
Roll any old job 401k into an IRA
This post was edited on 4/5/23 at 7:46 am
Posted on 4/5/23 at 7:52 am to ronricks
quote:
I have no debt
quote:
I am 43
So you own your home and have no debt? Or you rent and don't own a home?
Posted on 4/5/23 at 8:14 am to Harry Rex Vonner
I own a home. I have no debt. I drive a POS 2005 Toyota Camry with 140,000 miles on it. I max and have maxed every retirement account available to me (401k,Roth,HSA) since I graduated college. I have no kids. I don't spend money on anything. There really isn't a way for me to 'save' anymore as far as retirement accounts go. I have thought about using the money towards a rental property. Its not like I am taking the money out and spending it on a new car or jewelry or any other depreciating asset. My brother thinks I am crazy to not roll it over but I don't need it. Its just an idea I haven't done anything yet. Still pondering.
Posted on 4/5/23 at 8:16 am to ronricks
quote:
Don’t really need it but would be nice to have in cash for whatever
Why?
Posted on 4/5/23 at 8:18 am to JohnnyKilroy
quote:
Why?
Why not? We aren't guaranteed tomorrow.
Posted on 4/5/23 at 8:20 am to ronricks
@ronricks If true youre maxing all retirement accounts, why not just reduce contributions if you want to access to more cash now instead of taking a 10% penalty and paying taxes on an early withdrawal. Hard to belief someone could be so disciplined and investing focused early then take such a unnecessary tax/penalty hit.
Posted on 4/5/23 at 8:23 am to TorchtheFlyingTiger
quote:
@ronricks If true youre maxing all retirement accounts, why not just reduce contributions if you want to access to more cash now instead of taking a 10% penalty and paying taxes on an early withdrawal. Hard to belief someone could be so disciplined and investing focused early then take such a unnecessary tax/penalty hit
I hear you and like hearing opinions on this. I haven't made any decision yet and have been thinking about this for about 2 weeks now. I don't 'need' cash right now. I also would like to continue maxing all the accounts so don't want to reduce my contributions either. I've even thought about buying half gold half bitcoin with it for shits and giggles and see what happens. Kind of an 'experiment' so to speak. If I do anything with it other than rolling it over still leaning towards rental property.
Posted on 4/5/23 at 8:41 am to ronricks
quote:
Why not? We aren't guaranteed tomorrow.
Kind of a weird philosophy to have after maxing retirement accounts for 20+ years and not in retirement.
If you said you were taking the 10% penalty to fund living expenses in early retirement, that would be one thing.
You want to take the 10% penalty just for shits and gigs. Sounds dumb af.
Posted on 4/5/23 at 8:54 am to JohnnyKilroy
quote:
You want to take the 10% penalty just for shits and gigs. Sounds dumb af.
It might be dumb which is why I haven't done anything yet. Its nice to have options in life I can tell you that. Glad I'm not one of these folks that has a huge mortgage along with an $800 car payment, credit card debt, student loan debt, and no personal savings or retirement savings.
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