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After I leave my organization I want to look for an investment company to transfer my funds. Any suggestions for a LOW FEE company to transfer funds into a Roth IRA?

Apr 30, 2013 by Ryan in  |  Flag
5 Answers  |  6 Followers
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4 votes

Ryan, I have also dealt with a couple of retirement plan custodians who will allow a conversion from a traditional 401(k) to a Roth IRA during the transfer process. Check first and maybe save yourself a step.

2 Comments   |  Flag   |  Apr 30, 2013 from Kingsport, TN

Will the same thing work with a 403(b)?

Flag |  May 01, 2013
Barry Bailey CFP®, AIF®

It will work for a 403(b) if the plan custodian allows it.

Flag |  May 01, 2013 near Kingsport, TN

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3 votes

Hi Ryan! I'm going to make some assumptions (and we all know how that goes) so here goes. I'm going to assume that you will be leaving your current employment and you do not want to leave your 401(k) assets behind. If your current plan is a Roth 401(k), you should be able to easily make the transfer. Your HR department or plan provider should be able to provide the necessary paperwork to have the assets moved directly to the new custodian. If you have a traditional 401(k), you would need to first transfer the funds into a Rollover IRA, and then you could convert them into a Roth IRA. If you do this, you will incur taxes on the amount of the conversion, so be careful. I recommend Vanguard as one of the leading low-cost providers of mutual funds and ETF's. Hope that helps!

Comment   |  Flag   |  Apr 30, 2013 from River Hills, SC

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2 votes
Rich Winer Level 20

Ryan, When comparing two identical investments, I would pick the lower cost investment. That said, selecting anything based primarily on price can be a big mistake. If you're an experienced investor, then a discount brokerage firm or fund company with lower cost mutual funds may meet your needs. However, if you are not, it might be worth hiring a financial advisor to help you select the most appropriate, cost-effective investments (notice that I didn't say "lowest-cost") for your needs and objectives. When selecting mutual fund, I could pretty much care less about the costs. If a fund's net return (after fees and expenses) meets my needs and expectations with a comparable or lower amount of risk and volatility than its peers, I could care less about its fees and expenses. Good fund managers (like good doctors, lawyers and financial advisors) often charge more. If a fund's expense ratio hurts its performance, I can always sell. However, if a fund has a good long-term track record, the chances are pretty good its fees and expenses are not hurting its performance. My recommendation to you is to find a good financial advisor to help you select the investments and financial strategies that will help you meet your financial goals.

1 Comment   |  Flag   |  Apr 30, 2013 from Woodland Hills, CA
Dale Prescott Beals

Ryan, Rich's point about professional help is very well taken unless you are an experienced individual investor. You probably would not read a few books and then do an appendectomy on a family member. So, think in terms of the total cost of getting help (including all fees and commissions) as compared to value of avoiding the retirement-killing big mistakes that most investors make once or twice during their lives.

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Flag |  Apr 30, 2013 near Hendersonville, TN

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1 vote

I agree with Pam. Other low cost Brokers would include Fidelity, Interactive Brokers, Schwab, TD Waterhouse, etc. Some are lower cost than others, but try to provide more hand-holding or more "free" tools for your personal planning or research. You may need to compare a couple of them to decide what tradeoff between costs and additional tools is the best fit for you.

Comment   |  Flag   |  Apr 30, 2013 from Hendersonville, TN

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0 votes

Ryan, I can only echo the thoughts of others. There are many low cost brokerages; all will be able to convert your plan to a Roth. I’ll also echo the sentiment that cost is not everything. Typically what you will get for low cost is a passive investment with no advice.

I see the capitalized “LOW FEE’ and so it seems you pretty much have your mind set on what you want to do. I just urge you, going forward, to have an open mind about different types of investments and investment strategies.

Comment   |  Flag   |  May 07, 2013 from Delray Beach, FL

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