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New job, what to do with 401k?

Discussion in 'Off-Topic' started by andrew1220, Feb 9, 2019.

  1. andrew1220

    andrew1220 NES Member

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    So I start a new job with the state (MA) on Monday and I’m trying to figure out what I should do with the money in my 401k that I had with my previous employer?

    Obviously MA doesn’t offer a 401k, just a pension. Though they do offer a “SMART Plan” which I guess is a 457 plan? All contributions are voluntary not matched by the state. I declined to open a 457 as money is tight and I want all the money I can get for the time being. Maybe later I’ll start a 457 plan but for now I’m just banking on the pension for retirement - assuming I can put up with this job for 30 years....

    Anyway, I’m not all that knowledgeable when it comes to retirement/financial stuff. Just curious if there’s any financial planner type members here that have any advice?

    FWIW, I’m 31 years old. The balance of my 401k isn’t a huge amount - low 5 figures.

    Thanks!
     

  2. Junior314

    Junior314 NES Member

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    Roll over into an IRA.

    Look up some financial advisors and find one that doesn’t treat you like a moron and you will know you found the right one.
     
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  3. RumRunner

    RumRunner NES Member

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    I rolled all of my previous 401k's over to an IRA. You can keep it in your 401K if you want too, but generally after you are no longer an employee the fees will be higher.
     
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  4. Brucewillis4316

    Brucewillis4316 NES Member

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  5. Inside Out

    Inside Out NES Member

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    Agree -- Rollover to IRA.

    But you don't need an advisor to do this. Fidelity and Vanguard both have user-friendly websites with easy-to-follow instructions and are VERY low cost. You can do it yourself, it is not difficult and you'll save a ton in advisor fees. Pick a single Target Retirement 2050 fund, set it and forget it. You can always change it later with no tax consequences (because it's in an IRA).
     
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  6. CoastieRon

    CoastieRon NES Member

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    Roll into a traditional IRA. You do that in order to keep the tax benefit,. What happens is your 401k liquidates the assets, sends you a check, you deposit it into the new IRA and reinvest it.

    Easy peasy.
     
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  7. buckfarack

    buckfarack NES Member

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    Roll it into an IRA and open an online brokerage account. Put it in some reasonable mutual fun but always have it available for an opportunity that may present itself. I did that in 1994, rolled $10k into an IRA when I started a new job w no 401k. Bought $9k in aol stock after I used it and was convinced it’d be the next great thing. It split a few times on me and I got out around $240k. Cashed out, paid the penalties, paid off the almost the entire mortgage when I was 35. Coulda got out at $325k but I got greedy but I wasn’t stupid and didn’t lose it all like a lot of people did. It’s nice to have a little play money available to take advantage of that next great thing.
     
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  8. Varmint

    Varmint NES Member

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    Get a PM IRA, buy gold!

    I’m sorta kidding, I don’t have one, not sure how it works.
     
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  9. FPrice

    FPrice Retired Zoomie NES Life Member NES Member

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    Most financial advisors I have heard agree that you should never leave a 401K with an old employer - too much bad can happen.

    Most everyone above is right, roll it over into an IRA which you control. The only trick is finding a good person/company to help with advice.
     
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  10. andrew1220

    andrew1220 NES Member

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    Great advice! Sounds like the IRA is the way to go. My 401k is with Vanguard so rolling it into a Vanguard IRA should be somewhat easy I imagine.
     
  11. buckfarack

    buckfarack NES Member

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    For low five figures don’t overthink it, open an IRA and put it in a growth fund, it’s not rocket science. Don’t let perfect stand in the way of good.
     
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  12. mu2bdriver

    mu2bdriver NES Member

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    Direct rollover to an IRA. I prefer Vanguard. Good luck with the new job!
     
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  13. andrew1220

    andrew1220 NES Member

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    Wowza! So you invested $10k and got $240k!? That’s one hell of a return.
     
  14. andrew1220

    andrew1220 NES Member

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    Thanks! I’m leaning towards Vanguard only because my 401k is with them. Should make things easy I think.
     
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  15. andrew1220

    andrew1220 NES Member

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    Yeah I definitely don’t want to leave it with an old employer. I’m no financial expert but that just seems like a recipe for disaster. No need to have money linked to an old employer.
     
  16. Palladin

    Palladin NES Member

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    Roll it into a Fidelity Ira, that way you get to buy stocks and funds with it
     
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  17. mu2bdriver

    mu2bdriver NES Member

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    Probably will make it easier, but I also like them for their lower than average fees (other firms are just catching up to them on offering this), quality product breadth, availability of advisory services, etc.
     
  18. Varmint

    Varmint NES Member

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    Why is that? I think there’s some benefits of keeping a 401k, like you can withdraw at 55 instead of 59.5 with an IRA, and you can delay minimum distributions if you don’t retire.
     
  19. buckfarack

    buckfarack NES Member

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    That was back in the internet bubble days. Saw lots of people make a whole lot more but they didn’t pull the trigger and lost it all. Everyone, including my family member accountant, told me: 1. Not to sell 2. Not to cash out and take the penalties 3. Not to pay off the mortgage. Best thing I ever did (not listening to them)
     
  20. eisenhow

    eisenhow NES Member

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    Roll it over to an IRA at a place like Fidelity. Don't put it in a target date fund. With low 5 figures put it into an index 500 fund and let it grow for the next 30+ years .
     
  21. Varmint

    Varmint NES Member

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    Yeah I like Fidelity over Vanguard for that reason as well, although you could roll into any brokerage. I’m buying stuff like mining stocks with my Fidelity 401k.
     
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  22. buckfarack

    buckfarack NES Member

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    Jesus, he’s 31. God only knows what the withdrawal ages/laws will be in 20 years. This is not the time to be making decisions based on a four year withdrawal difference 25+ years from now.
     
  23. Varmint

    Varmint NES Member

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    They’re saying the same shit now about the super bubble.
     
  24. andrew1220

    andrew1220 NES Member

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    That’s awesome.
     
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  25. Viper22

    Viper22 NES Member

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    That's what I need to do. My employer was acquired, and I have a decent amount left in a Vanguard 401k which is no longer being contributed to. Should really call and get that transferred to an IRA. New company 401k is with Empower, which is not performing well.
     
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  26. Varmint

    Varmint NES Member

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    Well there may be other people reading the thread, that’s how the internets work. Was just curious why the consensus thought it was to roll over. Seems to me it’s mainly if you don’t like your 401k provider.
     
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  27. Wickedcoolname

    Wickedcoolname NES Member

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    Take advantage of your 457B as soon as you're able. It's a tax deffered retirement vehicle so your contributions come from pre tax dollars, so you will lower your taxable income.
    Which state agency are you working for?
     
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  28. Bison

    Bison NES Member

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    You do not want to do it this way. Choose where you want to have the IRA. I use Fidelity and Vanguard. They will help you fill out the paperwork to roll your 401(k) directly into the IRA. This avoids any withholding penalties and other timing issues. You can also usually roll it directly in kind to whatever you already have in your 401(k) if you like that investment. If not, there are a lot of options. I find an S&P 500 fund to be an easy and effective base fund.
     
  29. andrew1220

    andrew1220 NES Member

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    So that’s unique to Fidelity? I can’t buy stocks through Vanguard? I guess I need to read up on this a bit.
     
  30. Varmint

    Varmint NES Member

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    You can do it online. My new 401k is T Rowe Price. I’m definitely rolling that over if I quit.
     

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