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Author: riss333 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25242  
Subject: 401K Rollover Date: 11/21/2011 4:54 PM
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O.K., so we have left our 401k riding for a year now, while my husband has been off work on disability. My husband is now on SSI Disability and will be 64 this week. He will not be returning to his job. We were just notified that his company is moving their 401k business to another provider. We have until Dec 15th to roll over to an IRA or to let them move the 401k to the new provider. What is the best thing to do? I have been reading that it is best to roll over since we cannot contribute to the 401k anymore. What is the best way to go? And if we roll it into an IRA, should we remain with the company it is with now, or go to a brokerage? Can anyone give me some pros/cons???
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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24793 of 25242
Subject: Re: 401K Rollover Date: 11/21/2011 5:53 PM
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Most people like the flexibility an IRA offers. You can transfer your account almost at will (provided you obey the rules) meaning you have a wide array of choices and can easily change if you have good reason.

You will want to consider costs. Some 401K funds are subsidized by the employer, and some have excellent investment choices. If you have a good one, it can be tempting to stay. But often, people are stuck with whatever their employer selects--take it or leave it. That is why the IRA is usually preferred.

If you are invested in mutual funds, you will probably find that the same company is willing to act as your custodian. Vanguard and Fidelity are excellent at it--if you find their mutual funds attractive. Others can be ok too, but some have high expenses and you will want to avoid annuities. A self directed IRA at a discount broker can also be attractive. Then you can do a combination of individual stocks, ETFs and mutual funds. Brokers often charge transaction fees for mutual fund activities, but most have a list of funds for which those fees are waived. Consider the fees for services you plan to use and investments of interest before you decide.

You will also often encounter annual mainteance fees, and some have account minimums. All of these can figure into your decision. But remember if you decide you made the wrong choice, you can easily switch to another custodian once you find one you like.

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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24794 of 25242
Subject: Re: 401K Rollover Date: 11/21/2011 7:03 PM
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riss333,

You wrote, O.K., so we have left our 401k riding for a year now, while my husband has been off work on disability. My husband is now on SSI Disability and will be 64 this week. He will not be returning to his job. We were just notified that his company is moving their 401k business to another provider. We have until Dec 15th to roll over to an IRA or to let them move the 401k to the new provider. What is the best thing to do? I have been reading that it is best to roll over since we cannot contribute to the 401k anymore. What is the best way to go? And if we roll it into an IRA, should we remain with the company it is with now, or go to a brokerage? Can anyone give me some pros/cons???

I assume your husband is no longer officially employed by the company with the 401k? In that case, he can *ALWAYS* roll his 401k to an IRA at any time. His ability to roll over his funds is not limited to some arbitrary window. However, if he does not roll the funds out by then, there may be a short transfer period where he cannot access funds and he may need to contact the new plan fiduciary to initiate a rollover.

Likely the company sent that notice out to all plan participants because if a plan is terminated, even current employees may have the option to roll existing funds out of the terminated plan into an IRA instead of rolling them into the company's new plan. (I took advantage of this option once in 1999 when my employer merged with another company.)

- Joel

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