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Roll over old 401a or leave it alone

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  • Roll over old 401a or leave it alone

    I have an old 401a from residency. My hospital gave us $5,000 and it has been sitting in the 401a and growing since 2012. It is currently around $11,000. I've never contributed to it. Now I also have a 401k with my employer that I am maxing out. I am trying to decide if I should roll the old 401a into the new 401k or just leave them separate.

    My 401a has gone up about 220% since 2012. Annual rate of return about 9%.
    Here is a general breakdown of what it's made up of:
    Bonds 10%
    Large cap 40%
    Small/mid cap 14%
    International 36%

    My 401k is in BlackRock LifePath Index 2050 fund.

    The way I see it, if I think the current 401a plan is going to outperform the 401k plan I should just leave it alone, but if I think the 401k plan is going to outperform the 401a plan than I should roll it over. The 5year growth of the LifePath fund has been about 84%. Unless I'm missing something here it seems like I'd be better off leaving the two separate. Thoughts?

  • #2
    you're missing something. You can't compare the returns if the asset allocation in each plan is different. also, past performance doesn't bear any weight on future performance.

    The question you should be asked are what are your current 401k fees vs the old 401a fees. I also suspect the Blackrock lifepath index fund you are using isn't the best option for you. Why don't you list our all of your options in your current 401k plan and give us the fees? Don't give us the returns on what you can invest in...far better to pay attention to the fees. What are you invested in in the 401a?

    most likely with such a small amount in that 401a you probably should roll over into your 401k just for simplicity, unless your 401k has extremely high fees and sucky funds

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    • #3
      What are the options available (asset classes, passive index funds, brokerage links, etc), fees of both plans and expense ratios of options. Thats what you need to compare, not the performance.

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