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Is it better to roll my old 401K $ into my new job's program or combine with my wife's for high $? Both are strong co's?

We are concerned about keeping all $ in one account. But wondering if getting interest on double the $ should be considered? Both 401K programs are rated pretty close to the same with your rate system.

Dec 08, 2014 by Dia from Kenmore, WA in  |  Flag
7 Answers  |  6 Followers
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3 votes
Jim Hofheimer Level 4

Your choices are to roll over to your new employer's plan or roll into an IRA. I would work with someone to find out whether the new employer's plan is low cost with good options before deciding.

Comment   |  Flag   |  Jan 14, 2015 from Chicago, IL

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I would look at two factors when making this decision: How good are the investment options in the new 401k, and how involved do you want to be in managing this money? IF you enjoy managing your 401k and the investment lineup is good I would move the money into the 401k. If you do not enjoy managing the money and the investment lineup is subpar roll the money into a Traditional IRA it will give you many more options .

Unfortunately, we can not combine 401k's between spouses, would be nice to have all assets together though.

Comment   |  Flag   |  Dec 09, 2014 from Summerville, SC

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All of these answers are excellent. I would also advise making sure you have updated your beneficiaries on these accounts. Simple things like this can be just as important as more complicated investment decisions.

Comment   |  Flag   |  Jan 15, 2015

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Thomas Larsen Level 5

Roll your old 401(K) into the new job's 401(K), if costs are low and investment choices are of high quality. Combining your 401(K) with your wife's 401(K) is prohibited. Your combined household rate of return is not affected. Your next best option is to transfer (rollover) your old 401(K) into an IRA.

Comment   |  Flag   |  Dec 08, 2014 from Vail, CO

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Todd Warner Level 8

Dia - This is a common question and the answers that have been given are correct. Retirement accounts are for one person and you can't combine it with someone else and make it a joint account. They are individual retirement accounts. Your choices at this point are somewhat limited as well. You can keep the account in your current plan, if the plan will allow it to remain there. You can roll it into your new company's 401k plan or you can roll it over into an IRA account. The decision will depend on the investment options available in the 401k plans. Most times, your investment options in a 401k are fairly limited. In an IRA account, your options are almost limitless, stocks, bonds, mutual funds, etc. Compare the costs of each of the options and how you prefer to invest.

Comment   |  Flag   |  Aug 19, 2015

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John Essigman Level 17

Hi Dia,

As Thomas has described, IRA and 401(k) accounts belong to an individual person. They generally cannot be combined or comingled with the exception of a spouse inheriting an IRA, which can be claimed as their own if they so choose. Therefore, your options are to leave your 401(k) where it sits, roll it into your employer’s 401(k) if allowed by the plan, roll it over to an IRA, or roll it into an annuity.

There is some debate on moving retirement assets from a 401(k) into an IRA. Some 401(k) plans are low cost and economical while some are not. However, from my perspective, you have better control and more options outside of the 401(k) platform. Additionally, a company that goes into bankruptcy or receivership may place your 401(k) assets in limbo until the organizational issues have been untangled. Annuities offer some nice guarantees but the cost can be very high while surrender fees on loaded products can range from 4% to 8% or more (Fee-only no-load annuities generally do not have surrender fees).

My suggestion is that you articulate your retirement goals, become educated on cost, investment options, risk, and structure or seek out a fee-only advisor to help you through the decision process.


Comment   |  Flag   |  Dec 08, 2014 from Cleveland, GA

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The answer depends on the cost of the 401(k) at your new employer and it's options. Costs are one of the few things you can control, and unfortunately, too many times we see the costs of a 401(k) plan get into the 1.5% - 2.5% range of costs, which is too much.
You need to find what admin costs you pay as a participant, then add in the mutual fund costs. If you are paying much more than 1%-1.5% total, I would either move it into an IRA with a low cost fee only financial advisor, or consider doing it on your own with a low cost IRA provider like Vanguard.

Comment   |  Flag   |  Dec 09, 2014 from Oklahoma City, OK

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