Learn Me 401K Rollovers

So finally realizing that I have really been getting taken by my messy arrangement of 4 different 401K plans handled via two financial institutions. I'm just starting to research rolling them into my current employer 401K for simplification and control. Sitting here getting pissed as I look thru the various times that one of the 401K's has moved my money and charged me without my input over the last year..... Time for a change my friends.

Points of interest - concern -some is pretax and some is post tax -concerned about fees for closing out accounts and transfering to new ones -Looking to simplify and take more control of my investing

Learn me wise ones of the GRM...

Open IRA account at etrade.com. Phone up multiple 401K managers and tell them to send the money to your etrade IRA. Sign, mail and/or fax appropriate paperwork which they will provide. Done.

It is pretty easy to do.

I'd call whoever the administrator is for your current employer's 401k and talk to them about it, they can help get the ball rolling.

I use Fidelity, but it doesn't really matter. Open an IRA for the pre-tax and a Roth IRA for the post-tax. No reason to be saddled by the constraints of your current 401K. Then each time you move jobs close the old 401K and roll it into the IRAs.

The actual mechanics of it are very simple.

Appreciate the help gents! Apparently need to ring up the right folks Monday morning.

Just make sure none of them send you a check addressed to you. That is considered a withdrawal which will have withholding and penalties attached. Direct transfer from one financial institution to the other or a check from one to the other for the benefit of you.

Its certainly easier if they transfer direct, but not the end of the world. From Schwab:

If your employer sends you a rollover distribution check made payable to you, you can deposit it directly into your Rollover IRA. Be sure to write your Schwab Rollover IRA account number on the check and deposit it within 60 days to avoid taxes and penalties. Your plan administrator may have withheld 20% for federal income tax. You can recover the deducted amount by making sure that you roll over the amount you received from your prior employer plus the 20% that was deducted. Please see IRS Publication 590 or talk with your tax advisor for more details

I had to close two out to put it in an IRA, the checks were mailed to me. I then mailed it to the new investment company, no taxes penalties etc were taken. As long as it doesn't ever touch your checking or savings accounts etc you are in good shape. Do NOT, under any circumstances, deposit it in any of your personal accounts even if you plan to immediately write a check to the new fund!

I put mine in Vaguard's VWIAX fund, it's been a steady performer. No, it hasn't made the huge gains that some of the more volatile funds but it's continued to gain value even with the recent stock market swings. That's what works best; steady performance ove the long haul.

I am not enamored of the typical 401k, while they are better than nothing my biggest gripe is they typically have a limited number of funds for you to invest in and you also have little or no control over things. That's why I rolled mine into an IRA, even though I can't touch the money right now without interest and penalties I can move it to another fund if it seems worthwhile.

Look at the history of your current funds before moving anything, here's why: one of my 401's rollercoastered like hell, it typically would bottom out in approximately October and gain it all back by March. This was a pattern over a few years, so I held off till March, when it climbed that was when I closed and moved it. If you move the $ when it's at its low point, you have just turned a paper loss into a real one.

Pre and post tax 401's? You got me there, I'd suggest contacting a pro about that.

Please note, rules have changed recently, and I believe there is a limit of one check addressed to you per 365 days allowed. Otherwise, you may be subject to taxes and penalties.

There is no limit if it's a direct transfer to your IRA.

It's a fairly simple process. The first step is to identify where the money will land. This can be an existing 401k plan, or you can start your own rollover IRA through ETrade or similar. Whichever route, contact the ones that will receive and they will be more than happy to walk you through the process. In general, they tell you how the check needs to be titled and the mailing address, and then you contact the existing account and give them the details. You'll get confirmation numbers, and just remember to check in every week or two until the transfer happens. As long as the check is titled financial institution to financial institution, it will be a tax-free event, and should be fee-free, although the closing institution will probably find some way to add a small charge not specifically related to the closing.

Watch the ''expense ratio" of any given fund (or institution). I just moved all my stuff from fidelity (lowest expense ratio I could get there was 1% or so) to vanguard (now in a .05% expense ratio fund).

Expense ratio is the percent of your total investment they charge you per year just to invest your money. If you invest 50k for example, 1% means they charge 500 per year. .05% means 25 per year.

Expense ratio is charged whether or not the fund makes money - so even if they lose your money for you they will still charge you for doing it.

So just something to watch. Some funds make the expense ratio hard to find - this is usually done on purpose.

Is there an easy way to track down 401k plans from previous jobs?

I'm currently with Fidelity, but I know I had 401k options with at least two of my past employers, although I have no idea who those plans were with or how to get at the money I had contributed.

Do I just email/call the benefits managers for those companies?

PHeller wrote: Do I just email/call the benefits managers for those companies?

yes.