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Subject:  Re: Changing jobs - gap in eligibility Date:  6/25/2013  2:51 PM
Author:  joelcorley Number:  25075 of 26342


You wrote, Any options better than funding a taxable account until I'm eligible for the new 401k? Thanks in advance.

No, but you have my sympathy. I just went through something similar.

In 2010 I changed contracting firms. The new firm basically didn't have a 401k (long story). I didn't have the details, but knew their plan was going to be a problem so I immediately changed my election at my then-current job and shoved 80% of my pay from my then-current gig into that firm's plan ... even though it likely alerted them of my imminent departure. (At least they weren't surprised when I resigned.)

Anticipating a long period without a 401k, I began regular investment in a set of Vanguard funds - mostly their S&P 500 fund - around the end of 2010.

In August of 2012 I was approached by a major company about a full-time position. I started at the end of September and in October began funneling half my paycheck into their 401k in the hopes of catching up.

It was a little scary juggling the cash flows (or lack thereof); but being nearly 50 and having no way to contribute to any tax-advantaged retirement account was just as bad. I count myself lucky to have had the option, the means to exercise it for 2010* and 2012* and that I only really missed out on 2011. Missing a year where I'm eligible for catch-up contributions would really suck.

* I was within a couple grand for 2010 and about $200 for 2012.

- Joel
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