What should I do with my old employer 401k account at Fidelity?

[bayman]

Have an old employer traditional 401k at Fidelity and my new employer plan is a tradional 401k managed through Charles Schwab. I am leaning towards rolling over the old 401k from Fidelity to a Roth IRA, but should I transfer my account to Charles Schwab or stick w/ Fidelity?

I also have a TDAmeritrade account for personal stock trading. Can I or should I move it into a Roth IRA there?

[bjl584]

Fidelity is fine. You can leave it there.

But, there will be tax consequences to rolling a 401K into a Roth.

[msomnipotent]

You also have to consider the fees. I eventually got my husband to roll our old 401k over to the new employer since the last employer wasn't covering the administration fees for non-employees. It was about $200 a month just to have the account. We weren't trading, so there was no trading fees.

[snafu]

While considering changes, I suggest checking administration and Fidelity's management fees for the older 401K, and verifying those specific holdings to make sure they 'mesh' with the Schwab allocations, the economy and age factors. What are the administration fees and holdings management costs for the newer 401K? Having accounts at Fidelity, Schwab and TDAm is a lot of tracking. Would you consider using one [low cost/discount] brokerage for those you can control?

[Nutria]

The traditional 401(k) is tax-compatible with the traditional IRA (both being pre-tax). That's why I've rolled by previous-employer 401(k) accounts into traditional IRAs.

[LivingAlmostLarge]

But a Rollover IRA if you ever want to do a backdoor roth contribution counts against you when you try to roll the $5500 non-deductible to the Roth IRA. So it depends on what you make and what your plans are.

[Sam1000]

Most of the time with a 401k you don’t have a lot of options. Your 401k plan will have a set number of investment options for you to choose from. They likely have a default allocation if you don’t pick something unique. I’ve yet to come across a 401k plan that is actively managed by an investment advisor. They might exist - I just haven’t seen one yet.

[Nutria]

Most of the time with a 401k you don’t have a lot of options. Your 401k plan will have a set number of investment options for you to choose from. They likely have a default allocation if you don’t pick something unique. I’ve yet to come across a 401k plan that is actively managed by an investment advisor. They might exist - I just haven’t seen one yet.

An S&P500 mutual fund, and an investment grade bond fund are good enough for most people, most of the time.

[greenskeeper]

roll it into your new employers 401k plan (costs nothing), don't pay the tax to convert to a roth. Hopefully you already have a roth account established.

[Nutria]

roll it into your new employers 401k plan (costs nothing)

401(k) plans are more expensive than Rollover IRAs.

[GrimJack]

Call Vanguard and tell them you want to roll your 401k to an IRA with them; choose a fund and forget about it until you retire.

[Like2Plan]

401(k) plans are more expensive than Rollover IRAs.

This is not always true. Some (not all) of the fund choices in DHs 401K are institutional funds and the ERs are lower than even admiral shares at Vanguard. (It pays to look at plan expenses.)

And, if you do a rollover to an IRA it is a good idea to keep the money separate from other IRAs you may have in case you want to do a roll in to a future 401k. Some (not all) 401k plans have rules that require it.