Moving 401K to new employer
Recently left employer with a $46000, 401K. I thought I heard you say NOT to roll that into my new employer 401K on WGN other day, which I was planning to do. Is that correct? Open a Fidelity account?
Thank you for the advice-
64yr old, single guy here.
Terry Says
Yes, it likely makes more sense to do a DIRECT ROLLOVER to Fidelity or Vanguard, where the costs are likely to be cheaper than most 40l(k) plans. That leaves you with the responsibility of choosing funds. The existing funds don’t transfer; instead they transfer cash. Since it’s a rollover, there’s no tax consequence. So have it all rolled into their government securities money market fund. Then you might want to chose a more conservative fund for investing at this stage. So perhaps then move about $20,000 to their Equity/Income fund. And tell them to move $500 or $1,000 per month on a fixed day every month until 2/3 of your money is invested in this stock fund. That way you’ll never pick the “top” to buy — nor will you get the bottom! And you can leave 1/3 in the money market fund at this stage of life — losing a bit to inflation, but a very conservative position. Just my opinion.
