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What should I do with my old employer 401k plan at Fidelity?

190 17 October 5, 2017 at 11:52 PM
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Have an old employer traditional 401k at Fidelity and my new employer plan is a tradional 401k managed through Charles Schwab. I am leaning towards rolling over the old 401k to a Roth IRA, but should I transfer my account to Charles Schwab or stick w/ Fidelity?

I also have a TDAmeritrade account for personal stock trading. Can I or should I move it into a Roth IRA there?

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#2
Are you being charged monthly/annual maintenance fees for the old 401k now that you are no longer a qualified employee?

How do the investment options (and their expense ratios) in the old 401k compare to your new 401k and to what you can get in an IRA?

I would not choose TD Ameritrade since their list of commission-free ETFs is somewhat limiting.

Fidelity, Charles Schwab, and Vanguard are considered to be the top three low-cost brokerages if you're into highly diversified, inexpensive index funds.
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#3
Is it a Roth 401k? If not, are you sure you want to transfer to a Roth IRA and pay taxes and not just transfer to a regular IRA?
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#4
You would need to consult with your accountant, but generally one does not want to convert to a Roth 401k and pay the taxes unless there is some advantage to doing so.

I would find an IRA you like with whatever firm you prefer and do a direct rollover. There is no reason to leave the money in a fund or company that did business with your prior employer on general principles. My 2 cents.
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#5
It may not apply to you, but for anyone reading this - if you are 55 (50 for retiring police, firefighters, and medics) when you leave a job and think you may want to take advantage of penalty-free distributions, FYI on a reason not to rollover:

https://www.forbes.com/sites/advi...at-age-55/
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#6
Great question, I too have left over 401k which I'm vested in with Fidelity and new job uses T.Rowe. Anyone have experience rolling all into one. I also have an account with Charles & Schawb but only for the checking account.
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#7
Quote from slickpost
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Have an old employer traditional 401k at Fidelity and my new employer plan is a tradional 401k managed through Charles Schwab. I am leaning towards rolling over the old 401k to a Roth IRA, but should I transfer my account to Charles Schwab or stick w/ Fidelity?

I also have a TDAmeritrade account for personal stock trading. Can I or should I move it into a Roth IRA there?
I wouldn't move to a Roth because you are going to have a big tax hit (unless your 401k is a Roth 401k). Schwab has some good low cost investment options, so as long as your new 401k plan offers those, I would move the Fidelity 401k to Schwab to simplify your investments.

Quote from wfghost
:
Great question, I too have left over 401k which I'm vested in with Fidelity and new job uses T.Rowe. Anyone have experience rolling all into one. I also have an account with Charles & Schawb but only for the checking account.
This situation is different in that T. Rowe Price typically has higher cost options. I would either leave my old 401k with Fidelity because they have great low cost options. Or roll it into a rollover IRA at Shwab. If you ever think you will do a backdoor roth IRA contribution in the future, I'd just leave it in the old Fidelity 401k.
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Quote from bta15
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I wouldn't move to a Roth because you are going to have a big tax hit (unless your 401k is a Roth 401k). Schwab has some good low cost investment options, so as long as your new 401k plan offers those, I would move the Fidelity 401k to Schwab to simplify your investments.



This situation is different in that T. Rowe Price typically has higher cost options. I would either leave my old 401k with Fidelity because they have great low cost options. Or roll it into a rollover IRA at Shwab. If you ever think you will do a backdoor roth IRA contribution in the future, I'd just leave it in the old Fidelity 401k.
Thanks for the response. sounds like a good idea, return has been really good since i left and haven't contributed to it. C&S account i just use for their international atm reimbursement so i don't have a relational with an avisor there and I am so dumb when it comes to investments so I'll stick with fidelity.
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#9
I'm looking a moving a Fidelity 401k to a Schwab self-directed IRA. I prefer having more options for investment.
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Quote from bta15
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If you ever think you will do a backdoor roth IRA contribution in the future, I'd just leave it in the old Fidelity 401k.
This is a subtle but important point. For those doing back door Roth contributions, having any traditional IRA balances factors into the process for tax purposes. It is referred to the pro-rata rule.

This could factor into the decision to convert prior company 401ks if you need and want to use the back door Roth strategy. Of course, there are other considerations as have been previously mentioned.
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#11
Quote from Diplomat
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This is a subtle but important point. For those doing back door Roth contributions, having any traditional IRA balances factors into the process for tax purposes. It is referred to the pro-rata rule.

This could factor into the decision to convert prior company 401ks if you need and want to use the back door Roth strategy. Of course, there are other considerations as have been previously mentioned.
Can you expand upon this some more?
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