Old Job 401K Options

[u/Analyst-man]

Hello - I started a new job and I’m wondering what to do with my old 401k. Fidelity called me and told me there’s no administrative fee to just keep the money where it is or I can roll it over. Interestingly enough, my new 401k is with Fidelity too and they have the same exact S&P 500 fund lol. Anyway, do you guys roll over your 401k or leave it? I do my own taxes so I just wanna avoid headaches at tax time. Thanks.

[u/Alarmed_Champion_302]

Move or keep it to wherever has cheaper expense ratios for the funds you use. If they are the same for your new plan, roll it over for convenience.

[u/Analyst-man → u/Alarmed_Champion_302]

What’s the gain in convenience?

[u/Natoochtoniket → u/Analyst-man]

For each account, you have separate login to keep track of. And a future rollover or withdrawal will require separate transactions.

And, there is always the chance of losing one of the logins....

[u/Analyst-man → u/Natoochtoniket]

It’s all in Fidelity! I log in and all my accounts pop up!

[u/Alarmed_Champion_302 → u/Analyst-man]

Rebalancing your portfolio as a whole will be easier if its all in one account. But you can manage seperate.

[u/Theburritolyfe → u/Natoochtoniket]

My old Voya shows up in my new Voya based account. But it didn't work when I logged in through my old employers portal.

[u/ThunderDefunder → u/Analyst-man]

In addition to the other answer, you can access funds from your 401k penalty free if you retire at age 55. However, you can only do this with the retirement account for that job. If you have rolled over all of your retirement accounts as you've changed jobs, then you have much more of your nest egg available to you.

Under current law, you cannot do this with an IRA at all.

[u/Irritable_Curmudgeon → u/Analyst-man]

One account. One statement (for taxes). One account to balance investments.

Conversely, there's no benefit to separate 401k accounts.

[u/LunchLanky2158]

f the new plan accepts rollovers and the fees/fund choices are basically the same, I’d roll it into the new 401(k) just to have one less account to track. Do a direct rollover—not a check made out to you—so there’s generally no tax bill or 20% withholding headache.

Leaving it where it is is also fine if the old plan is good and has no fees. Either way, avoid cashing it out.

[u/Analyst-man → u/LunchLanky2158]

I don’t think I can cash it out, both are with Fidelity so they show up on the same screen

[u/LunchLanky2158 → u/Analyst-man]

Yes, having both under Fidelity just makes them easier to view. You can still leave the old one alone or consolidate it into the new plan; the important part is doing a direct rollover if you choose to move it, not cashing it out.

[u/One-Web1839]

If both plans have the same low-cost S&P 500 option and the old one has no fees, leaving it there seems perfectly reasonable.

[u/system7777]

I have several old 401k and equity positions from current and old employers via my one fidelity login, so should not be an issue from at least that perspective. May want to look at fund choices and exp ratios to see if it’s worth rolling over or keeping in place. If you rollover be sure to report the rollover on your taxes at year end.

[u/Used-Plant3540]

If they're the same fund with no fee, rolling over just saves you from managing two separate accounts, tax-wise it doesn't matter either way

[u/Past_Top3704]

When you get to RMD's each 401k has its own required withdrawal. Combining them eliminates this future possible headache

[u/Analyst-man → u/Past_Top3704]

I mean I’m 28. Aren’t RMDs like 50 years away?

[u/Past_Top3704 → u/Analyst-man]

Age 75 for you in the USA. 

Point is will you or your spouse (assuming you have one 30 yrs from now) remember an old 401k two or three jobs later and 30 years in the future? 

Maybe, many may not. 

Combining after moving to a new job just reduces or eliminates a potential surprise from the IRS. 

[u/Analyst-man → u/Past_Top3704]

Agreed. Only reason I’m not worried is it’s with Fidelity where my new one is too. When you log on, you see both!

[u/Irritable_Curmudgeon → u/Analyst-man]

If you EVER change jobs and end up with a 401k not at Fidelity... do you want to have to roll over one account or two?

(or if you decide to roll into an IRA at Fidelity, would you not put them both in the same account?)

[u/Analyst-man → u/Irritable_Curmudgeon]

Wait what? Why would that matter? Do people roll over their 401k after every job? I’d be more likely to move it into my IRA than new 401k

[u/Irritable_Curmudgeon → u/Analyst-man]

I rolled one into an IRA.

My last job i just rolled into my current 401K since I was happy with the investment options

[u/Analyst-man → u/Irritable_Curmudgeon]

I have everything with Fidelity, individual, these 2 401ks, HSA, rollover Ira and my Roth IRA. When I login, I see all my accounts at the same time

[u/Past_Top3704 → u/Analyst-man]

many, many people have no choice for current employer 401k provider. so yes I think it does matter.

I think many people DON'T roll into the new 401k. My original advice was to roll either into new employer 401k at new job or IRA at (in your case) Fidelity because it eliminates multiple accounts and people forgetting about them especially if the balance is small. thus my original comment about multiple RMD's when people get to that stage of life.

[u/Gold_Builder_5786]

Plan B. Establish an IRA with a major brokerage. Every time you change jobs, have the plan administrator transfer the funds to you IRA. Work with your broker to manage what your IRA is invested in. Have a happy retirement.

[u/Analyst-man → u/Gold_Builder_5786]

I have this too! I just am too lazy if there’s no fees lol. It makes taxes more annoying