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Subject:  Re: Roll old 401(k) and allocate assets Date:  5/11/2013  3:38 AM
Author:  gdett2 Number:  72227 of 88535


The biggest factor in their ability to "directly" transfer shares is the availability of the security.

If they do not have the same security available in both accounts, they can't do it. Fidelity and Vanguard offered "like" securities with no transaction charges. This involved institutional shares in the 401k vs open market shares in the IRA.

An acquaintance that had a brokerage 401k with ETFs and some individual stocks was able to do a transfer of all shares without transaction fees.

What it all boils down to is the fees since there is no long-term/short-term holding period or taxes on the sale. There is risk in price movement if you cash out, transfer and buy. I lost a bunch of value in 2006 from the time the paperwork was submitted until the transaction was made while moving an IRA. I had it go in the opposite direction this past December when I gifted some shares to charity and they went up in value.

The financial institutions want to keep your money at their company and are generally willing to make the move as smooth as possible. If they eat some of their fees in the process, they will make that back in the future.

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