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I still have money in a previous employer's 401(k) program. I need to move it out. The question is where?
Should I roll it over to my current 401(k)?
Or should I roll it over to an IRA?
Your input is appreciated.
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I still have money in a previous employer's 401(k) program. I need to move it out. The question is where?
Should I roll it over to my current 401(k)?
Or should I roll it over to an IRA?
Your input is appreciated.


Obviously, this will be a personal decision in the end...but if I were in your position, I would roll the 401(k) into an IRA with Vanguard. This would give me access to all of their index funds (my desired "simpleton" allocation is 80% Total Stock Market; 20% Total Bond Market). There are many options and you need to investigate all the possibilities...

Take your time...learn about all the options...and then make your move. Don't be in a hurry...the worst thing you could do would be to make a decision you regret!

ACME
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Are the funds in your current employer's 401(k) better, worse, or the same as are available to the general public?

Are there any additional fees in the 401(k) based on asset balance?

How much is "having everything in one place" worth to you?
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Roll it over into a Rollover IRA with Vanguard or Fidelity.

Split it between small/midcap and large cap value and growth. Put some in bonds. Index funds were popular when the whole market was on fire but now managed funds should do better. Check out which funds with Vangard and Fidelity have good morning star ratings and are beating their peer groups.

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My recommendation is along the same lines, but varies slightly. I personally would put very little if anything in bonds if you are relatively young; put it all in stocks. More risk, but if you have plenty of time to make up any short-term losses, more return. I would gradually ease a part of my portfolio into bonds as I approached retirement age, and will probably have most of my portfolio in bonds once I reach retirement age.

Second, I would still stick with index funds. They may not be doing well in the short term, but short term is not what investing is about. ;-) Their lower costs make them the way to go IMHO, when you consider the track record that managed funds have in beating the market consistently over the long haul.

Third, for a truly diversified stock portfolio, don't forget about international stocks. This can help even out any bumps caused by economic factors that affect only the US, exchange rates, etc. Vanguard has a Total International Index Fund (or words to that effect), which trades under the symbol VGTSX.

I am in my mid-thirties, and my personal asset allocation model is:

60% Vanguard VFINX (large-cap blend/index fund)
22% Vanguard NAESX (small-cap blend/index fund)
18% the aforementioned VGTSX

You could throw in a little VIMSX (mid-cap blend/index fund) if you wanted.

My two cents; YMMV. =)

Thanks!
Joe
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