cancel
Showing results for 
Search instead for 
Did you mean: 
     
Highlighted
Explorer ○

Rollover 401k question

We retire this year and try to figure out what to do with our 401k. Currently we have our 401k, rollover IRA and Roth IRA in 3 different place, Merrill lynch, Fidelity and Vanguard. Majority the 401k are in custom made fund, but  lot of holdings are overlap with 3 different provider. How can I streamline the holding and consolidate into one provider? I don't know about investing, with the dumb luck and savings. It grows to a large asset and I intend to pass on to my children. We will not withdraw or need the fund from those account. What should I do? We went to wealth management in Merrill Lynch for advise, they charge us 2% fee which is a lot. Anyone has suggestion? Currently I have cash/bond/international/domestic stock in 16/16/13/54. The large holding is VPMAX on both rollover IRA and tax account beside company stock in 401k.  I intend to do NUA for my company stock which grows a lot since I inquire it 30 years ago. 

8 Replies
Highlighted
Frequent Contributor

Re: Rollover 401k question

Consolidate at Fido if you anticipate needing help in future. Local office is a plus.

Vanguard is ok too but it is still M-W 8-5 w/o local presence. You are already familiar.

In-kind transfers are desirable but that doesn't apply to special retirement classes or CITs or SVs; some sponsors aren't cooperative.

YBB
Highlighted
Explorer ○

Re: Rollover 401k question

I am not sure what is CIT or SV, but I can research it. Fidelity has about only 1/4 of the 401k asset, maybe I look into it. thanks

0 Kudos
Highlighted
Frequent Contributor

Re: Rollover 401k question

Agree with Yogi

We have our accounts at Fido. Good service, statements are prompt and always right, They don't bug us with sales/promotions. But if you live in a major metropolitan area, you likely have an office near you, thus allowing you or surviving spouse a place to actually go and face-to-face your account rep...virus restrictions notwithstanding. Schwab, I understand, offers similar services and they usually have local offices in larger cities. And you don't mention it, but you don't want to do the Edward Jones or Ameriprise route. Depending on the size of the 401(k) + IRA, a 2% fee is outrageous. Today, 1% is getting to be high and most NAPFA Fee-Only investment managers around here are on a sliding scale from .5% to 1%, even on smaller accounts.

Vanguard is probably the most consumer friendly, but its all 1-800 and on-line.

To help you transition, I'd suggest you go through the Garrett Financial Planning Network, find a hourly rate CFP near you and get some assistance to make the rollover and asset allocate. Likely cost you a few hundred bucks, but in the long run well worth it. The problem with the Network around here is those guys are busy, with schedules going out months, so the sooner the better to get scheduled. You'll likely need some help on the NUA stock, particularly if its a private company (not publicly traded).

BruceM

Highlighted
Frequent Contributor

Re: Rollover 401k question

SV = stable-value fund [guaranteed-rate fund]

CIT = Unlisted commingled investment trust, available only in 401k/403b

YBB
0 Kudos
Highlighted
Explorer ○

Re: Rollover 401k question

Thank you all the suggestion. We do have a Fido branch close by our living areas. Fee base FP maybe the other option for us. 

0 Kudos
Highlighted
Explorer ○

Re: Rollover 401k question

correction about the fee, it is 1% not 2%, I start to get senile. I hold about 340K on fix income fund with YTD with 1% return rate in my 401k. But it has high expense ratio 0.3.  I intend to roll it over to IRA, any fund should I consider. 

0 Kudos
Highlighted
Explorer ○○○

Re: Rollover 401k question

Before rolling over a 401-K you should examine your personal age and income in retirement issues.  As long as you have permanently left the company that sponsored your 401-K you are eligible to draw from it regular taxable income at age 55 !!! , with no early withdrawal 10% tax penalty.  Once you roll over that becomes 59 1/2.  The new Secure Act makes it for some,  more advisable to start doing more and larger Roth conversions ASAP.  For that matter it is a good idea to start a Roth if you did not already have one, with some de-minimus conversion from the IRAs to Roth by age 55 and pay the $30 tax penalty on a $300  conversion to have full access to distributions from any and all Roth conversions you might start doing at age 59 1/@ when the early tax penalty goes away on IRA distributions.  There can be pernicious increases in your Medicare premium once one of you are widowed.  The amounts you can convert annually to Roth may decrease as a single tax payer so as to not hit the two year look back taxable income levels that exceed near $163 K, where the single filer  would see their medicare premium nearly quadruple.  In your out retirement years income and gains from a Roth can be used to pay some off your quarterly estimated taxes and even EVENTUALLY all the taxes on out years Roth conversions.  This can substantially reduce your taxable income as cash taken from an IRA to pay Federal taxes counts towards your gross income and then your AGI. 

Widows/ Widowers in their second year as single filers face two year medicare premium increases against look backs at over 87K AGI, then again over $109 K and then over $136 K .  So if you are widowed and 2 years previously had above $109 K AGI your medicare premium can nearly double.  That is likely an $1800 annual reduction in your monthly SS payments. 

Be careful out there...

0 Kudos
Highlighted
Frequent Contributor

Re: Rollover 401k question


@NomasDOZ wrote:

Before rolling over a 401-K you should examine your personal age and income in retirement issues.  As long as you have permanently left the company that sponsored your 401-K you are eligible to draw from it regular taxable income at age 55 !!! , with no early withdrawal 10% tax penalty.  Once you roll over that becomes 59 1/2.  The new Secure Act makes it for some,  more advisable to start doing more and larger Roth conversions ASAP.  For that matter it is a good idea to start a Roth if you did not already have one, with some de-minimus conversion from the IRAs to Roth by age 55 and pay the $30 tax penalty on a $300  conversion to have full access to distributions from any and all Roth conversions you might start doing at age 59 1/@ when the early tax penalty goes away on IRA distributions.  There can be pernicious increases in your Medicare premium once one of you are widowed.  The amounts you can convert annually to Roth may decrease as a single tax payer so as to not hit the two year look back taxable income levels that exceed near $163 K, where the single filer  would see their medicare premium nearly quadruple.  In your out retirement years income and gains from a Roth can be used to pay some off your quarterly estimated taxes and even EVENTUALLY all the taxes on out years Roth conversions.  This can substantially reduce your taxable income as cash taken from an IRA to pay Federal taxes counts towards your gross income and then your AGI. 

Widows/ Widowers in their second year as single filers face two year medicare premium increases against look backs at over 87K AGI, then again over $109 K and then over $136 K .  So if you are widowed and 2 years previously had above $109 K AGI your medicare premium can nearly double.  That is likely an $1800 annual reduction in your monthly SS payments. 

Be careful out there...


Penalty free withdrawal from a 401k plan at 55 is only available if the employee terminates employment on or after attaining 55. I have no clue of what you are referring to on why a taxpayer should pay a $30 penalty on a $300 conversion. Please explain.

0 Kudos
Announcements