Rolling over retirement money?

[golfgal]

We need to roll over DH's retirement money (401K and Profit Sharing money) since he is started working for a new company after 18 years with one company. What would you do-roll it into the 401K of the new company or put it into some kind of IRA, or something else? We don't have to move it now, but we would like to do it soon. Ideas?

 

[mickeyfan2]

I would not roll it into the new company 401K but set up a seperate account to roll it into. This will give you more choices and a better diversity in your portfolio.

 

[Dan Murphy]

Depends on many factors, what is important to him. Loan accessibility, spousal rights, investment choices, investment company selection, among the factors. Best is to discuss with your/his financial advisor.

(not to be taken as financial advice)

 

[wnissen]

If you are happy with the investment choices available at the new company, it will be less hassle to roll over to that company's plan. If you roll it into an IRA, you will have to take care of two accounts, but you will be able to make all your own investment choices. Typically, the funds available in small-company 401(k)s are mild to moderate rip-offs, and you will likely pay less in expenses by opening an IRA with Vanguard, Schwab, Fidelity, etc. However, you cannot borrow against an IRA, which might be important to you.

Whichever rollover choice you make, the two key things to remember are: Roll it over, don't cash it out! So many people cash out even though they end up paying that 10% penalty, which means they never should have put it in the 401(k) in the first place. Second, insist that the funds be transferred by wire from the old to the new account. If you get a physical check, there are extremely strict rules about how it must be deposited which could lead to a huge penalty, and sometimes there are tax withholding problems as well. Just pay for the wire transfer, it's cheap insurance.

Walt (also not giving investment or tax advice)

 

[4nana]

I agree with Dan and would ck with finance advisor as each company is very different.

Not the same I know, but our experience when DH retired was he could only roll over his share of contributions plus any profits. The portion the company matched had to stay and could not be rolled over.

 

[brerrabbit]

I would recommend rolling it over into a self directed retirement account. I have worked for several companies over the years and had money in each of the 401 K plans. Whenever I left a company I would role all funds into my self directed IRA. The assets can be moved in the form they are in. That means if you like the funds or stocks you have in the company 401 k you can keep your money in them and move them to your own account. The advantage is that you are no longer restricted on how to invest the funds. If you saw the market crash coming and wanted to move all your money into cash by selling everything you can, with no restrictions. It has worked out wonderfully for me and I really feel its the best way to go.