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Hello, my wife and I are expecting a baby this December. Does it make sense to have her go through her employers insurance alone rather than have a family plan with a higher deductible that we are currently on? Or does it end up being the same?
Currently deductible $7200 (family HDP + HSA)
Wife’s deductible if moved alone $2400
First time going through this so I’m trying to see what would work out better at the PwC" class="linkified" target="_blank" rel="nofollow" >end.PwC
Nonononono.
When you are done with a 401K, do a direct rollover to an IRA.
Do not transfer to another 401K.
401Ks have fewer investment choices, and stricter rules about loans and distributions. IRAs are freedom. 401K are not!
You can even open the IRA at the same firm where your new 401K is! Just make sure you call old 401K provider and new IRA firm and make sure you are clear that you are doing a direct rollover, so you don't accidentally create a taxable distribution. You need to know how to have old co make out the check--generally it's "[new firm name] FBO Jane Doe IRA".
Every firm has teams that handle this and they will walk you right through this!
Good luck!
Mentor
Agreed with IBM1. Do not rollover to a IRA. You will open yourself up to the pro rata rule when doing a backdoor Roth IRA.
Additionally, some 401ks have institutional funds with significantly fee structures than IRAs. Accenture, for example, have institutional versions of their funds with lower fees than even their admiral funds
Step 1: call Merrill lynch
Merrill Lynch were two different people!
Before you transfer the funds, evaluate which 401(k) plan has funds that you prefer more. If you like the funds that your new employer’s 401(k) plan offers, then transfer your funds from your previous employer’s 401(k) through Vanguard to Merrill. You can go to the Merrill Benefits site and there is a tab for transferring/rolling over funds. You’ll mostly likely need the name (Merrill), account number and address. You’ll then go to your Vanguard/previous employer’s 401(k) site to submit the request to rollover funds. They’ll most likely cut a check that says FBO your name. Don’t deposit the check. You’ll fill out forms from Merrill and mail the check with the forms.
Second scenario is you prefer the funds at your previous employer’s plan. Call and ask if there are any additional fees charged for keeping your investments within the plan if you are not an employee. If there are no additional fees, then you won’t have to take any action besides remembering you have another 401(k) account.
Mentor
Yep. Don’t listen to Attorney1. Not sure why he’s repeating the same bad advice
Why can't you still keep it with Vanguard?
Thanks for your help!
Coach
In-kind transfer
Switched over to KPMG from Deloitte?
Thanks. I’ll be having to make that transfer in the not too distant future.