? about 401ks

[waijai]

I currently have a 401k w/ my previous employer that I need to roll over. It's dropped down in value quite a bit over the past couple months. My question is...should I wait until it goes up in value to roll it over? Or should I just roll it over now?

[sweeps]

Were you already planning on rolling over your 401k before the value dropped? The drop in value alone shouldn't change the reasoning for rolling over or not.

Consider rolling over your 401k to a Roth IRA. You'll pay taxes of course, but better to pay taxes while your balance is down 30% or so.

[jIM_Ohio]

Agree with sweeps. If you have 5k of a large cap fund in 401k, then rollover to 5k of a large cap fund in an IRA, it is a wash sale and you really did not lose or gain anything investment wise.

[noppenbd]

If the 401k is invested in high cost investments I would roll it over immediately. If you like the investments but want to have more control, then the only reason to wait would be the volatility. You take the chance that while the rollover is occurring the market could have a huge day. Of course the opposite is true as well. Over the long term a few weeks out of the market will not matter that much on average.

[kork13]

Just a quick clarification for myself.... there's no limitation to rolling over a 401k, IRA, or other retirement account is there? Like in this case, if waijai has $30k in a 401k, the full amount can be rolled into a Roth IRA, correct? Also, after a rollover, are you limited to what you can contribute to the IRA for the remainder of the year?

[disneysteve]

Originally Posted by sweeps

The drop in value alone shouldn't change the reasoning for rolling over or not.

Exactly. One thing has nothing to do with the other. You roll over an old 401k to gain more control over your money and expand your investment options. Whether or not the 401k has made money isn't relevant.