I have a 401K from my previous job that has a pretty good amount of money in it, but now I can no longer contribute to it. I made a good amount of money when I was contributing to this 401K and contributed about 17% of my salary.

Now I make a lot less money and work for the state. I have a pension but am also contributing to a state 401K, but only 2% as that is all I can afford.

My old 401K is getting me a 13% return for the last year and my new 401K for the same time period is getting me 18%. Do you think I should keep them separate or move my old one into my new one that I can contribute to? My old one is run by Fidelity and I have liked them, but so far it seems the state 401K is also run well.

There are a number things to consider. What are the fees like for the old 401k? Your old company may still be covering the fees but I doubt it. I wouldn’t move just based on one year of returns.

When I’ve left jobs I’ve usually rolled over my 401k out of the old company, but I did not combine with my new job’s 401k.

I’m sure there are some experts here that can weigh in and tell you all of the factors to consider.

Mrs. Mike is an HR guru and is in charge of our retirement funding (and way smarter than me), she says:

"roll it out of the old 401K into a rollover IRA with a local financial guy (look at Dave Ramsey's site). The reason is, that his investment options in the old 401K is limited to the options his old employer chose. The same is true of his new 401K-limited by the employers choices.

The financial advisor can pick the best form what's on the market (and change those investments as need be).

The finance guy can also see if you are saving enough."

It would depend on what instruments Fidelity has you invested in, they may and probably are different from what the state is using. If it were me I would just let it alone for a while.

I am not the smartest person about these things so take what I am saying with a grain of salt.

So far I have left both alone for the last 2.5 years and both accounts are doing well, but of course so is the market. I probably need to get a financial advisor, but it is hard to know who to go with. I will check out Dave Ramsey’s site. I don’t have an IRA account and probably should; I just haven’t educated myself on them well enough. I am not unhappy with my old 401K as it made me $38K in the last year. I have kind of liked having them separate, but I am not a financial guy.

Lots of details missing for any of us to help you out much. 5% difference is tempting, but I’ve never rolled a 401K into another employer’s 401K so there may be issues there. I’ve always rolled them into my own IRA that I have with a wealth advisor that I trust. That’s really no issue.

StorminNormin,

I am a financial guy. Lots of Licenses and credentials... Roll the Fidelity 401k over to an IRA. Where you get the IRA is up to you. If you need/want an advisor, choose a fee based advisor that has at least a CFP certification. The industry is full of people claiming to be a financial advisor when in reality they are a financial product salesperson looking for a commission.

Do not buy an annuity.

quote:

Originally posted by armedprof:
StorminNormin,

I am a financial guy. Lots of Licenses and credentials... Roll the Fidelity 401k over to an IRA. Where you get the IRA is up to you. If you need/want an advisor, choose a fee based advisor that has at least a CFP certification. The industry is full of people claiming to be a financial advisor when in reality they are a financial product salesperson looking for a commission.

Do not buy an annuity.

I am definitely getting the vibe of rolling it into an IRA. My boss from my previous job sings praises about her financial advisor, and she is happily retired, so I may check him out. I will have to drive to Houston to meet with him, but that is fine. I will check out his credentials.

Your results may vary but two employers back when I left the offer was made to leave my 401K with them.

While the returns were good I declined. My issue is over the 17 1/2 years I was there and participating in the plan the management of the 401K was changed four or five times.

While I was employed there we were notified wher there was a change forthcoming. But when you are not there on a daily basis sometimes you are not informed as quickly as you would like.

There is normally zero reason to leave any money in an old employers plan. move it to an Ira and put it in investments that work for you, plans always have limited options and unless they exactly match what you want no upside. Never move it to another employers plan for the same reason. Returns is this short term market mean nothing to this issue.

^^^^^
This and learn about your investments and do not count on a Financial Advisor 100 percent. My biggest losses were with a Financial Advisor.

Learn what sectors are the strongest in the market. Check out the Fidelity Sector Funds like the Semiconductors Or Technology which are up over 40 percent this year. It can become a second job and be very rewarding. You get out of it what you put into it. Go to the library and read their investment literature like Value Line, etc

Here is an Investor Business Daily ETF composed of 50 of their Number 1 rated stocks.

I would either combine them for simplicity and ease of management, or roll into an IRA with a custodian that has no annual or management fee and that has a selection of "no transaction fee" funds (no fee to buy or sell).

Roll it over into your new one.

quote:

Originally posted by hrcjon:
There is normally zero reason to leave any money in an old employers plan. move it to an Ira and put it in investments that work for you, plans always have limited options and unless they exactly match what you want no upside. Never move it to another employers plan for the same reason. Returns is this short term market mean nothing to this issue.

I agree with this.

My advice is transfer it to an appropriate age-based retirement fund at Vanguard and forget about it.

One nice thing about rolling it over: you can resume contributions if your income in the future makes that feasible.

Something like this:

https://personal.vanguard.com/...=0696&FundIntExt=INT

-------------------------------------------

quote:

Originally posted by 41:
^^^^^
This and learn about your investments and do not count on a Financial Advisor 100 percent. My biggest losses were with a Financial Advisor.

Learn what sectors are the strongest in the market. Check out the Fidelity Sector Funds like the Semiconductors Or Technology which are up over 40 percent this year. It can become a second job and be very rewarding. You get out of it what you put into it. Go to the library and read their investment literature like Value Line, etc

Here is an Investor Business Daily ETF composed of 50 of their Number 1 rated stocks.

That’s the easy part, trying to figure when it will crash so you can pull out your money before it does is tougher.

Normally I would agree with the “roll it over” point of view. However I did not do that for my 401k with Fidelity because they offered some investment funds that are closed for new investors (Vanguard Primecap Admiral and Fidelity Low-Priced Stocks) that I wanted to keep money in. So I have both IRAs and 401k accounts with Fidelity, and find that convenient.

Moving funds out of a 401(k) to an IRA could expose those funds to creditors depending on state law treatment of IRAs. If asset protection is a big deal to the OP, that's another factor to consider.

Keeping track of this thread. Good info.

Roll it over to a brokerage account with Vanguard or Fidelity. I use Vanguard because they have a ton of good low cost funds and also for a minimal amount you can invest in other families mutual funds. Of course they offer everything else including stock trading, bonds, CD, etc.

A roll over is a must to avoid having to pay income taxes.

https://investor.vanguard.com/...ver/how-to-roll-over

Vanguard also offers Personal Advisor Services if you do not want to go it strictly on your own. $50,000 minimum required.

https://investor.vanguard.com/...sor/financial-advice

"Here's how Vanguard Personal Advisor Services can help you:

Our advisors are required to act in their clients' best interests at all times. Learn how a Vanguard advisor partners with you
A Vanguard financial advisor can add meaningful value compared to the average investor experience. Find out how an advisor adds value
And just as you'd expect from Vanguard, you get it all at a low cost—only 0.30% of your assets under management annually. See how you could benefit from our low fee."


While there are good financial advisors out there but there are few of them and far between. As mentioned a lot just tow a company line and get you into their hi fee/expense company products. Very few will beat the S&P 500 index over time on their stock/stock fund selections with their fees deducted and it is not difficult to look brilliant in a long bull market. The bear market/long term performance will separate the men from the boys. If an advisor does not have a frank discussion about your tolerance for risk, then run far away.

I am not looking for a financial advosor but if I was I would probably look into the the Ric Edelman Group.

https://www.edelmanfinancial.com/radio

https://www.edelmanfinancial.com/

quote:

Originally posted by sjtill:
Normally I would agree with the “roll it over” point of view. However I did not do that for my 401k with Fidelity because they offered some investment funds that are closed for new investors (Vanguard Primecap Admiral and Fidelity Low-Priced Stocks) that I wanted to keep money in. So I have both IRAs and 401k accounts with Fidelity, and find that convenient.

I have been a long time investor in the Primecap fund too. One of the very few funds that consistently beats the the S&P 500 short and long term since it's inception in 1984 with it's yearly return of 13.8 percent. I can't blame you for not wanting to give that gem up. Still closed to new investors as is it's near twin fund Vanguard Primecap Core Investors.