Old 401a options?

[WCIFanGirl]

I have my current employer 401k, Roth IRA, and taxable accounts all with Vanguard.

I have about $25k in a 401(a) at Fidelity from residency with limited investment options.

I would like to move this to Vanguard to simplify my investing life and access more options for this money.

What are my financially sound options, if any? Am I better off just living with this account being at Fidelity and seeing it as institutional diversification?

[djohnflatfeecfp]

Does your 401k allow you to roll in this 401a balance?  If so, might be a good choice if you are doing Backdoor Roths.

[jfoxcpacfp]

There is really no need for institutional diversification, although I've heard this mentioned before. Institutions basically offer the same investments for purchase/exchange/sale or at least plenty to fill your portfolio with a solid and appropriately diversified array of funds. People choose an institution for other reasons, such as you like the kind of reports you can get, they have better customer service, they have lower exchange fees, and so on. In other words, there is no reason to diversify the kinds of reports you have access to - it only complicates your financial decisions.

You mentioned the magic word - simplify. Yes, you should consolidate into as few institutions as possible for simplicity. At most, your goal should be one company for individual accounts and one for employer accounts. If you can accomplish this at the same company, which is what you're aiming for, all the better.

djohnflatfeecfp has a good suggestion about rolling over to your 401k, if your employer allows.

[djohnflatfeecfp]

jfoxcpacfp wrote:

There is really no need for institutional diversification, although I’ve heard this mentioned before. Institutions basically offer the same investments for purchase/exchange/sale or at least plenty to fill your portfolio with a solid and appropriately diversified array of funds. People choose an institution for other reasons, such as you like the kind of reports you can get, they have better customer service, they have lower exchange fees, and so on. In other words, there is no reason to diversify the kinds of reports you have access to – it only complicates your financial decisions.

You mentioned the magic word – simplify. Yes, you should consolidate into as few institutions as possible for simplicity. At most, your goal should be one company for individual accounts and one for employer accounts. If you can accomplish this at the same company, which is what you’re aiming for, all the better.

djohnflatfeecfp has a good suggestion about rolling over to your 401k, if your employer allows.

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I'm just posting because Johanna said I made a "good suggestion."  This seriously made my day!

[jfoxcpacfp]

djohnflatfeecfp wrote:

I’m just posting because Johanna said I made a “good suggestion.”  This seriously made my day!

Click to expand...

You are hilarious. And I need to be more generous with compliments  ops:

[WCIFanGirl]

Thank you for the advice!

Upon your suggestions, I contacted Vanguard and was happy to hear that my 401k plan does allow for this rollover. Apparently I contact Fidelity and they will send me a check made out to Vanguard for the rollover.

Vanguard assured me this is not a taxable event but said he couldn't speak to whether or not I would incur fees from Fidelity by doing this... Does anyone know if I should expect any fees?

 

[djohnflatfeecfp]

WCIFanGirl wrote:

Thank you for the advice!

Upon your suggestions, I contacted Vanguard and was happy to hear that my 401k plan does allow for this rollover. Apparently I contact Fidelity and they will send me a check made out to Vanguard for the rollover.

Vanguard assured me this is not a taxable event but said he couldn’t speak to whether or not I would incur fees from Fidelity by doing this… Does anyone know if I should expect any fees?

 

Click to expand...

Glad to hear you are making this move.  A fee upon distribution is typically based on what the old 401a plan document states.  Fidelity should have this answer though.  If not, you will need to contact your old employer.

[jfoxcpacfp]

WCIFanGirl wrote:

Vanguard assured me this is not a taxable event but said he couldn’t speak to whether or not I would incur fees from Fidelity by doing this… Does anyone know if I should expect any fees?

Click to expand...

When you contact Fidelity about the r/o, ask about fees. It will depend upon the funds you have and the time you've held them.

[WCIFanGirl]

Thanks all - I called Fidelity and requested the rollover: no fees! As a borderline millennial, talking to humans on the phone is usually a last resort, but I am learning that with personal finances it's often most efficient.