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Transferring Money from Roth 401k to Roth IRA, when does it make sense?

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  • Transferring Money from Roth 401k to Roth IRA, when does it make sense?

    I am a current medical resident and soon to be attending. My wife worked throughout residency but stopped after the birth of our son. She has been investing in her company retirement plan. They have a Roth option so we have contributed all money to their Roth 403b (with me in lower earning years as a resident). We will be moving and not going back to her current employer, and we’re not sure when she will resume working again (and if she does, likely will be part time). Her Roth 403b totaling ~$50k is currently at Fidelity in two excellent Institutional Premium funds, the S&P 500 (FXAIX, ER 0.015) and International Index (FSPSX, ER 0.045). However, her Roth IRA, and the rest of our money (my Roth, Taxable Account) are all at Vanguard. I’m trying to decide whether it makes sense to keep the money at Fidelity in her Roth 403b but not be able to make other contributions vs rolling it over to Roth IRA at Vanguard? Here are the ideas I’m wrestling with:

    -ER at Fidelity Institutional Plus Shares are better than Vanguard Admiral Shares: favor Fidelity Roth 403b

    -ER between Institutional Plus and Admiral shares is not THAT MUCH DIFFERENT (we’re not talking active vs passive funds for instance): favor Vanguard Roth IRA

    -Inability to contribute further into the account: favor Vanguard Roth IRA

    -All of our other money is at Vanguard: favor Vanguard Roth IRA

    -Prefer TSM fund vs S&P500 (albeit minor difference): favor Vanguard Roth IRA

    -Moderate amount of money in the account (50k is not incredibly small but also not huge either): tie

    -Her future employer (whenever that may be) could use Fidelity for their workplace retirement account: Favor Fidelity Roth 403b

    I would appreciate any and all thoughts.

  • #2
    Move it before RMDs kick in. You can leave it otherwise.


    • #3
      ERs are so similar that it isn't going to make a difference. Just do what is more convenient in the long run (keeping things in one place at vanguard is my vote).


      • #4
        I would move it to a Roth since you have more investment choices and it will be a little easier administratively.  On the other hand if you are happy with the two funds you are in, and you aren't getting assessed any other account fees, I don't see any reason why you couldn't just leave it in the 403(b).