$35K from 401k to rollover after leaving job; suggestions?

livinlite · Post by **livinlite** » Thu Jan 03, 2013 6:33 am

I have a new job as of Dec. 17th and have just now gotten all the paperwork through from my previous employer on my 401k options. I have ~$35K with T.Rowe. My first thought is to roll that over into a traditional IRA and not pay any taxes on the disbursement.
(I believe once its converted I can withdraw $10k of that to use as a first-time homebuyer downpayment)
Any recommendations on companies to do the rollover with? Anything to watch out for?
*btw - I searched for answers and didn't come up with anything..but if this has been covered, please forgive/link me.

altoid · Post by **altoid** » Thu Jan 03, 2013 6:39 am

When our company closed out 401k and started to give everyone SIMPLE IRA, everyone in the company did a IRA rollover, it was pretty straight forward. We all opened accounts in Charles Schwab, and the fund was transferred with nothing deducted. However I am not sure if the company as a while paid for the service or not.

dragoncar · Post by **dragoncar** » Thu Jan 03, 2013 1:35 pm

I guess it depends on your investment style. If you are more of a Boglehead, then Vanguard would work. If you trade more often, perhaps a discount brokerage. Some will give you a few hundred "sign up bonus" to make the move, so definitely check that out.

Chad · Post by **Chad** » Thu Jan 03, 2013 2:37 pm

Roll it over into an online broker like Schwab, E-Trade, TD Ameritrade, etc. This way you can invest it in almost anything you want from Vanguard to options to individual stocks. I'm not suggesting you do any of this, I'm just advocating giving yourself options. I personally use both E-Trade and TD Ameritrade. Note that E-Trade has a 2-factor authentication option if you are worried about online security.

dot_com_vet · Post by **dot_com_vet** » Thu Jan 03, 2013 2:44 pm

Rolling it over to Vanguard would likely give you the lowest cost if you're interested in a mutual fund. Their "Target Retirement" funds are excellent if you want to set it and forget it.

livinlite · Post by **livinlite** » Fri Jan 04, 2013 1:30 am

At this level of savings, I'm probably "set it and mostly forget it", so I'll look into the Vanguard option; appreciate the suggestions.

RealPerson · Post by **RealPerson** » Fri Jan 04, 2013 4:20 am

The Vanguard Target Retirement Funds are a great deal and very convenient. You do pay, however, a higher cost that buying the component Vanguard mutual funds. Not sure if it is worth spending extra for the convenience of 1 fund versus owning a few.
You could look at your preferred Target date fund and see what is in it. Then you can buy those funds from Vanguard individually. No rocket science. You could decide to rebalance once a year and take care of the whole thing is 10 minutes each year. Saves you some management fees, and they do add up over the long haul.

Wild · Post by **Wild** » Fri Jan 04, 2013 7:59 pm

I rolled over the old employer 401k into a traditional IRA at Scottrade, and also used the penalty exemption to withdraw (up to) 10K as a first-time home buyer/borrower. I've had good success with Scottrade and enjoy being liberated from the extremely narrow 401k investment options.