rolling over a 401(k) from ex employer into an IRA...

[progree]

3. The safest way is an institution to institution direct transfer -- the reason I say that

Last edited Fri Feb 10, 2023, 08:27 PM - Edit history (1)

besides it being virtually a unaminous opinion from innumerable articles I've read over the decades -- it is the most assured way that you don't inadvertently take possession of it which makes it taxable in full, unless you get it rolled over in a proper manner in 60 days or less into an IRA or another 401k account. And if you do it that way, there are other pitfalls to be aware of in making these 60 day rollovers.

If you fuck up, you can end up with it all in a taxable account, and paying taxes on the entire account balance next year.

It's currently sitting in a T.Rowe Price retirement account from my last job.

Is it a 401k account there? Or an IRA account there? If a 401k account, is that controlled by your ex-employer?

I rolled over a 401k to a Vanguard IRA in the late 90's, so that's been my only experience with doing that. In which case, discuss with Vanguard and follow their instructions. Discuss with your employer or T Rowe Price or whoever is the current custodian.

I've also had inherited IRAs transferred to me at Fidelity, in 2005, and that went smoothly too. Again, in that case, contact Fidelity and follow their instructions. Discuss with your employer or T Rowe Price or whoever is the current custodian

Or whatever institution you want it to end up at -- contact them and follow their instructions.

My experience with both transfers was that it went smoothly. I am happy with both Vanguard and Fidelity.

Both Vanguard and Fidelity offer various levels of investment management, e.g. the full traditional financial advisor route, or one that cost less and uses Robo-asset allocation with occasional human contact, or full Robo, or none of the above. (That's my impression anyway, I haven't done a deep dive into either one). I use none of the above because I've been reading AAII Journal (American Association of Individual Investors) and investment newsletters for decades. My tax preparer gave me tax help with these decisions (and thankfully recommended I convert some of my traditional IRA to a Roth IRA in multiple increments over the years).

There's also the option sometimes of transferring it to a new employer -- if that's what you want to do, ask the new employer how to proceed.

In both of my cases, stock funds and bond funds were involved, and assets were directly transferred without having to sell them first.

Anyway, Job One is getting it into another 401k or into an IRA via direct institution to institution transfer. After that, there is plenty of time later to worry about stocks vs bonds vs balanced funds or ETFs and indexed fund and blah blah blah.

Good luck