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Managing 401K plans from previous employers

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  • Managing 401K plans from previous employers

    I had different 401k plans through different employers during my residency and fellowship. I will be finishing my training in the next couple of months and will have a new 401k plan from the new employer. What should I do with my previous plans? Is there a way to merge them all into one? Please advise

  • #2
    Roll them into a Traditional IRA.  If you want to do backdoor Roth, you can roll them into your new plan, if your investment costs are reasonably low and you have enough investment choices (index funds) to build a diversified portfolio.  The third alternative is if you have any 1099 income is to use a solo 401k as another place to roll your old plans into.
    Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

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    • #3
      Is there any major downside if the old 403b/401ks are left in the old plans after leaving the residency/fellowship? Besides additional accounts thus additional admin fees.

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      • #4
        Not at all.  Especially if you want to do backdoor Roth and the old plans are better than your current one!
        Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

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        • #5
          The only thing I would add to what has already been said is that may be differences between 401k and IRA when it comes to creditors.  In terms of asset protection I believe 401ks are protected more so than an IRA - but it is on a state-by-state basis.  That may be a factor in whether you want to leave money in an old 401 vs. rolling into an IRA

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          • #6
            Some plans let you keep the money in there.  Others only give you a year or five once you part with the company.

            My advice is to make a rollover IRA.  It is fun and painless.  I have done several and it is liberating to have a full menu of investing options.

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            • #7




              I had different 401k plans through different employers during my residency and fellowship. I will be finishing my training in the next couple of months and will have a new 401k plan from the new employer. What should I do with my previous plans? Is there a way to merge them all into one? Please advise
              Click to expand...


              Yes, you can merge all into a single rollover IRA. Read your SPD to see if your new 401k allows roll-ins from other accounts.

              If you want to

              • do a backdoor Roth and

              • you or your spouse do not have any self-employment income (i.e. so your spouse can hire you) and

              • your new plan is a good one (you can find ratings at BrightScope), then


              the roll-in to the new 401k plan is what you should do.
              Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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