New Company, Old 401k

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date New Company, Old 401k Lloyd Sargent 10-04-2007  Re: New Company, Old 401k PeterL 10-04-2007  Re: New Company, Old 401k Sandra Loosemor... 10-04-2007  Re: New Company, Old 401k kastnna 10-04-2007  Re: New Company, Old 401k joetaxpayer 10-04-2007  Re: New Company, Old 401k BreadWithSpam 10-04-2007  Re: New Company, Old 401k Lloyd Sargent 10-04-2007  Re: New Company, Old 401k wyu 10-04-2007  Re: New Company, Old 401k Sandra Loosemor... 10-05-2007
Posted by Lloyd Sargent on October 4, 2007, 10:15 am I worked for a company with a really good 401k plan. Then, I left that company. Now I am working for another company, but want to put money (before taxes) into the previous 401k. Talking to our wiz in accounting, he sez it isn't possible. But, I CAN move it into the new companies 401k plan (which isn't very good). So here is my dilemma: do I open a SECOND 401k (where I may lose money in the long run) OR pay post-tax dollars to the previous 401K plan (which is currently running ahead of inflation)? Or is this just a YMMV situation? Posted by PeterL on October 4, 2007, 12:47 pm > I worked for a company with a really good 401k plan. Then, I left that > company. > > Now I am working for another company, but want to put money (before > taxes) into the previous 401k. Talking to our wiz in accounting, he > sez it isn't possible. But, I CAN move it into the new companies 401k > plan (which isn't very good). > > So here is my dilemma: do I open a SECOND 401k (where I may lose money > in the long run) OR pay post-tax dollars to the previous 401K plan > (which is currently running ahead of inflation)? > > Or is this just a YMMV situation? Roll the old 401K into a self managed rollover IRA. Practically all the brokerages and MF companies will set up a rollover IRA for you. Posted by Sandra Loosemore on October 4, 2007, 4:04 pm >> I worked for a company with a really good 401k plan. Then, I left that >> company. > > Roll the old 401K into a self managed rollover IRA. Practically all > the brokerages and MF companies will set up a rollover IRA for you. If the OP's old 401k plan really is "really good", why roll it over? I still have a big chunk of money in a 401k plan from two jobs ago because it offers some funds I can't get access to in an IRA account: access to institutional-class shares with lower expenses but without the minimum investment requirements, some really good funds that are closed to new investors, and load funds with the load waived. Right now my money in that account is split between LSBDX (institutional shares) and LLPFX (closed fund), and I'm quite happy with those two choices. I have other investments in a Roth IRA and taxable account, plus my current employer's 401(k) plan. -Sandra Posted by kastnna on October 4, 2007, 4:25 pm > > If the OP's old 401k plan really is "really good", why roll it over? Maybe he should or maybe shouldn't. First we need to define "good". Is it becuase of the great profit sharing and employer match (that's gone now)? Or maybe its the fees (although the low expense ratios of ETFs and Index funds are almost impossible to beat)? WHY he thinks its "good" will really be the determining factor. Posted by joetaxpayer on October 4, 2007, 4:34 pm Sandra Loosemore wrote: > If the OP's old 401k plan really is "really good", why roll it over? > > -Sandra Hmmm, what happened that you are less cynical than your prior posts? Or did you just rush the typing? :) I caught this point as well. I've noted (ok, bragged) that my 401(k)'s S&P fund charges 5 basis pts. I'd be hard pressed to roll over and jump to 10. (one friendly warning. Prior to rolling over a 401(k), one should see if they have any post tax IRA money. If they intend to convert to Roth, all IRAs are aggregated to determine what's taxable. If they have minimal pretax IRA money, they can convert in 2010 with little tax impact. Once that 401(k) is rolled over, it's part of the total IRA balance. This may not apply to all, but it should be considered for clients to whom it applies.) Disclaimer - this is not a tax tail wagging anything. The above is independent of the asset allocation proper for the account owners. JOE Similar Threads Posted starting 401k in new company March 8, 2007, 12:54 pm Re: starting 401k in new company March 10, 2007, 8:39 am company or self-directed 401k May 29, 2007, 3:16 pm The *company* economics of a 401k match May 13, 2008, 5:15 am Loans Company February 22, 2007, 12:10 pm How to take private company public? September 24, 2007, 1:39 pm company car...what is the compensation reported to me? June 12, 2008, 6:47 am Multiple policies from one company - Is it wise? October 4, 2006, 10:56 am Life insurance in company pension January 17, 2007, 9:53 am what if the mutual fund company goes belly up April 25, 2007, 7:27 pm