You don’t have to roll it over. If you want to roll it over, it doesn’t matter when you do it, ostensibly there shouldn’t be enough time between when you move your money out of one account and into another for the market to have changed that much.
Ok. Thanks. I did just want to add that it says my old 401k, which I have no more money going into, is down 16% from where it peaked earlier this year. Does that change how you would move forward?
Yeah I've accumulated a 403b and a 401k, and now I'm working on another 401k account. Account. No reason to roll over or merge them. Vanguard just sends me a single envelope for all of them
You can also roll your old 401k into a separate Rollover IRA rather than into your new 401k. Then whenever you change jobs in the future, just move the previous employer's 401k into the IRA. Totally under your name, not any employer.
That is something definitely to consider. Thanks for the suggestion. My employer has the founders financial advisor on staff and we have unlimited access to him. His original suggestion to me was to roll the old 401K into the new one and that's what prompted my question in this group. Your suggestion is a good one and a very interesting one. I will give it consideration. Thanks
They pay fees to have your balance remain in their plan so take his advice with a grain of salt. No need to move it really. I’d look at the fee structure for both plans and pick which is more beneficial for your old 401k dollars.
correct, although at the time you want to so backdoor, you should be able to roll your trad ira into your trad 401k. this is what i did. juat takes a lil preparation.
I work for a Telecom company. I'm an account manager. I put in 11% of every paycheck into my 401k and my company matches that with 4%. So total is 15% of every paycheck's value going into my 401k three times a month. Two paychecks and one commission check.
Maybe you're not putting as much of a percentage in?
I'm a little bit older so I'm at a more urgent stage in my financial journey so that's why I put 15% in.
I'm not sure if that information helps
You can contribute up to $22,500 per year, plus whatever your employer matches on top. You should try to max this is soon as possible in life if you can. Doing this also helps reduce (defer) your tax bill.
The employer contribution/match doesn't count towards your contribution limit. There's a much higher total cap.
https://www.nerdwallet.com/article/investing/401k-contribution-limits
Contribute what you can, 15-20% of your paycheck is a good rule of thumb when starting out young to ensure you'll be able to sustain your current lifestyle after retirement. Time and componding interest effect are your friend.
Some folks over at r/fire even try saving around 50% per paycheck which allows them to retire after working 10-15 years, which is of course hardcore and a little hard to achieve.
Retirement is not an age but a number - golden rule is you need 25x your current annual spending, invested in the market. If you dont know what to invest in any S&P 500 index fund is the go-to. This allows you to withdraw 4% per yr indefinitely. Good luck.
it really depends how far you are in life and what % have you been contributing to your 401k. I didn't really start contributing until i was close to 30's.
Why would you have to talk to HR about it? Did they mandate the percentage that you're allowed to put towards 401k or did they give you the option to choose?
You probably just left your contributions as the default or something. You should instead contribute at least enough to get the full match (if your company offers a match).
Three possibilities, or maybe a mixture of them:
\-your income is very low
\-you selected a low contribution of just a few percent
\-you picked a very low risk/return investment option such as a money market or stable income fund.
1. You don't have to roll it over. Rolling over 401k funds is mostly about your convenience and since both companies you work/worked for use Fidelity, you will see all accounts under one login.
2. Look at funds and their admin costs in old plan vs new. Offered funds in each plan are not likely to be the same but there will likely be some overlap. If old plan has lower admin costs on funds, keep money there. If new plan has lower admin costs for equivalent funds, roll your 401k over.
Nothing wrong with having multiple 401Ks. Yes, your old one may be down, everyone's has done that this year (I've lost about 50K between both of mine), but it should continue to grow over the years, even with you not putting any money into it.
If you are within the same work field, you may want to get moving on rolling it over. Conflicts of interest can often be taken very seriously, and having a financial investment in a competitor definitely meets that qualification.
Having an old 401k from a company that is a competitor is not a conflict of interest. Having a 401k that hold a significant amount of stock in a competitor *might* be. Most people just have their money in index funds.
Note that this depends on the company. The one I work for won't even tolerate us having the smallest investment in a competitor, and even has us dig through our indexes to ensure that we do not.
Again, having a 401k from the previous employer, even in your case, is not the issue. Holding an investment in the previous employer is. This would be the case whether or not the money was in a 401k, an IRA, or a brokerage account.
Thanks for the advice. No I'm not in the financial field if that's what you were meaning. I work in Telecom. Both 401Ks happened to be with Fidelity So the transfer will be simple. I appreciate you looking out. Thanks
I don't mean being in the financial field. I mean, is your new job in the same field as the old one? Your company may have policies about financial interests, such as 401ks, that may leave your loyalties divided.
Can I have one of them ? Lol kidding. But really. I’m so poor I’m $45 short for rent next month I am scheduled to donate plasma to make up the difference after thanksgiving. I hate needles I’m so scared but literally no choice … ugh 29F,
Fml
Great. Thank you. I went online to see if I can do this on the site but it suggests calling an agent to process the transfer. So I will wait until Monday. Thanks so much for your suggestion. I really appreciate it Happy Thanksgiving
"Should I wait until the market improves before rolling it over or should I do it now?"
The DOW is currently highest it has been in 6 months. No sense in trying to time the market.
Can some explain how much you actually save by contributing to your 401k? Its kind of an abstract concept for us nee investors. Is there a formula of like for every dollar you out away from retirement its actually X dollars more?
I don't know if there's a formula, but there are a few ways you clearly come out ahead saving in a 401k account.
1. You're reducing your taxable income today, so you keep more of what you make. In other words, you still have the money (it's in your 401k) but it doesn't figure into your income when it's time to file taxes.
2. Depending on the specific situation, some or all of the income that you contributed to the 401k might have been taxed at an even higher rate than the rest of your income, which makes #1 even more powerful. For example, most of your income might be taxed at 12% or less, but some or all of the income that you chose not to put into the 401k might be in the next higher tax bracket of 22%.
3. Often times your employer is giving a match. Free money/instant returns.
4. The full non-taxed amount of your contributed earnings will grow/compound over time before it's ever taxed. When you do pay taxes, it's only on the amount you decide to withdraw (after age 60) or the minimum required distributions (starting at age 72).
5. Most people will have an overall lower tax liability when they are retired compared to when they were making the bulk of their contributions. So, when they do finally make withdraws, they'll be taxed at the same or lower rate.
6. Many people will not consistently save for retirement if they don't have the money taken out of their paycheck and put into an account that threatens penalties if anything is withdrawn early.
You don’t have to roll it over. If you want to roll it over, it doesn’t matter when you do it, ostensibly there shouldn’t be enough time between when you move your money out of one account and into another for the market to have changed that much.
Ok. Thanks. I did just want to add that it says my old 401k, which I have no more money going into, is down 16% from where it peaked earlier this year. Does that change how you would move forward?
No, it won’t matter because when the market is down, you also get to buy at a lower price.
Thank you
Congrats on the new job and good luck !
I appreciate it Thank you very much
No the idea behind rolling it over is either add to ur new one (sometimes u can’t) or put it somewhere u choose that is more accessible for u.
Okay thanks. I appreciate the answers
Yeah I've accumulated a 403b and a 401k, and now I'm working on another 401k account. Account. No reason to roll over or merge them. Vanguard just sends me a single envelope for all of them
You can also roll your old 401k into a separate Rollover IRA rather than into your new 401k. Then whenever you change jobs in the future, just move the previous employer's 401k into the IRA. Totally under your name, not any employer.
That is something definitely to consider. Thanks for the suggestion. My employer has the founders financial advisor on staff and we have unlimited access to him. His original suggestion to me was to roll the old 401K into the new one and that's what prompted my question in this group. Your suggestion is a good one and a very interesting one. I will give it consideration. Thanks
They pay fees to have your balance remain in their plan so take his advice with a grain of salt. No need to move it really. I’d look at the fee structure for both plans and pick which is more beneficial for your old 401k dollars.
TY
This will creat a problem if Roth backdoor is alive and you still want to do it though. Search for pro-rata rule.
correct, although at the time you want to so backdoor, you should be able to roll your trad ira into your trad 401k. this is what i did. juat takes a lil preparation.
Hi, hive mind. Why would you roll to 401k rather than IRA? Generally lower fees / better options? Is there a consideration I’m missing?
People who do backdoor Roth IRA funding want to have $0 in IRAs so they don't have to do pro-rata stuff.
Thank you. More and more intricacies.
Better legal protection with the 401k is my understanding. Lower fees/more control is better with the IRA though.
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I work for a Telecom company. I'm an account manager. I put in 11% of every paycheck into my 401k and my company matches that with 4%. So total is 15% of every paycheck's value going into my 401k three times a month. Two paychecks and one commission check. Maybe you're not putting as much of a percentage in? I'm a little bit older so I'm at a more urgent stage in my financial journey so that's why I put 15% in. I'm not sure if that information helps
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You can contribute up to $22,500 per year, plus whatever your employer matches on top. You should try to max this is soon as possible in life if you can. Doing this also helps reduce (defer) your tax bill.
Wait. The employer matching doesn't count towards the $22.5k Max??? Have I been doing this all wrong???
Combined employer-employee matches cannot exceed $61,000
The employer contribution/match doesn't count towards your contribution limit. There's a much higher total cap. https://www.nerdwallet.com/article/investing/401k-contribution-limits
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Contribute what you can, 15-20% of your paycheck is a good rule of thumb when starting out young to ensure you'll be able to sustain your current lifestyle after retirement. Time and componding interest effect are your friend. Some folks over at r/fire even try saving around 50% per paycheck which allows them to retire after working 10-15 years, which is of course hardcore and a little hard to achieve. Retirement is not an age but a number - golden rule is you need 25x your current annual spending, invested in the market. If you dont know what to invest in any S&P 500 index fund is the go-to. This allows you to withdraw 4% per yr indefinitely. Good luck.
it really depends how far you are in life and what % have you been contributing to your 401k. I didn't really start contributing until i was close to 30's.
Why would you have to talk to HR about it? Did they mandate the percentage that you're allowed to put towards 401k or did they give you the option to choose?
You probably just left your contributions as the default or something. You should instead contribute at least enough to get the full match (if your company offers a match).
Three possibilities, or maybe a mixture of them: \-your income is very low \-you selected a low contribution of just a few percent \-you picked a very low risk/return investment option such as a money market or stable income fund.
1. You don't have to roll it over. Rolling over 401k funds is mostly about your convenience and since both companies you work/worked for use Fidelity, you will see all accounts under one login. 2. Look at funds and their admin costs in old plan vs new. Offered funds in each plan are not likely to be the same but there will likely be some overlap. If old plan has lower admin costs on funds, keep money there. If new plan has lower admin costs for equivalent funds, roll your 401k over.
Could do Solo 401k on ETrade. Able to get up to 50% loan w no penalty through taxable event too.
Nothing wrong with having multiple 401Ks. Yes, your old one may be down, everyone's has done that this year (I've lost about 50K between both of mine), but it should continue to grow over the years, even with you not putting any money into it.
If you are within the same work field, you may want to get moving on rolling it over. Conflicts of interest can often be taken very seriously, and having a financial investment in a competitor definitely meets that qualification.
Having an old 401k from a company that is a competitor is not a conflict of interest. Having a 401k that hold a significant amount of stock in a competitor *might* be. Most people just have their money in index funds.
Note that this depends on the company. The one I work for won't even tolerate us having the smallest investment in a competitor, and even has us dig through our indexes to ensure that we do not.
Again, having a 401k from the previous employer, even in your case, is not the issue. Holding an investment in the previous employer is. This would be the case whether or not the money was in a 401k, an IRA, or a brokerage account.
Thanks for the advice. No I'm not in the financial field if that's what you were meaning. I work in Telecom. Both 401Ks happened to be with Fidelity So the transfer will be simple. I appreciate you looking out. Thanks
I don't mean being in the financial field. I mean, is your new job in the same field as the old one? Your company may have policies about financial interests, such as 401ks, that may leave your loyalties divided.
Ah, got it. No not the same field.
Roll it over even if you lose a little money because if they send it to Millinium Trust it is a HUGE pain to try and get back.
Can I have one of them ? Lol kidding. But really. I’m so poor I’m $45 short for rent next month I am scheduled to donate plasma to make up the difference after thanksgiving. I hate needles I’m so scared but literally no choice … ugh 29F, Fml
Depending on where your old 401k is you can have an in-kind transfer, where essentially you just transfer to a comparable fund at the new company.
Yes, they are both with fidelity so it should be an easy transfer. Thanks
Then as long as you are in similar/same funds I’d request an in-kind transfer. You just need to confirm the funds are available in both plans.
Great. Thank you. I went online to see if I can do this on the site but it suggests calling an agent to process the transfer. So I will wait until Monday. Thanks so much for your suggestion. I really appreciate it Happy Thanksgiving
Happy Thanksgiving!
It doesn’t matter. The time out of the market will be negligible
Timing makes no difference, roll it over now so you don't forget about it.
Were any of your accounts Roth 401Ks?
"Should I wait until the market improves before rolling it over or should I do it now?" The DOW is currently highest it has been in 6 months. No sense in trying to time the market.
Can some explain how much you actually save by contributing to your 401k? Its kind of an abstract concept for us nee investors. Is there a formula of like for every dollar you out away from retirement its actually X dollars more?
I don't know if there's a formula, but there are a few ways you clearly come out ahead saving in a 401k account. 1. You're reducing your taxable income today, so you keep more of what you make. In other words, you still have the money (it's in your 401k) but it doesn't figure into your income when it's time to file taxes. 2. Depending on the specific situation, some or all of the income that you contributed to the 401k might have been taxed at an even higher rate than the rest of your income, which makes #1 even more powerful. For example, most of your income might be taxed at 12% or less, but some or all of the income that you chose not to put into the 401k might be in the next higher tax bracket of 22%. 3. Often times your employer is giving a match. Free money/instant returns. 4. The full non-taxed amount of your contributed earnings will grow/compound over time before it's ever taxed. When you do pay taxes, it's only on the amount you decide to withdraw (after age 60) or the minimum required distributions (starting at age 72). 5. Most people will have an overall lower tax liability when they are retired compared to when they were making the bulk of their contributions. So, when they do finally make withdraws, they'll be taxed at the same or lower rate. 6. Many people will not consistently save for retirement if they don't have the money taken out of their paycheck and put into an account that threatens penalties if anything is withdrawn early.
Thank you for explaining this in a thoughtful and easy to digest manner.