401K on changing jobs

Amazon
UNaW34

Go to company page Amazon

UNaW34
May 29, 2021 25 Comments

What do people do with 401K account when changing jobs? I am about to leave Amazon and going to Google. With Amazon, I have 401K account in fidelity. With Google, I am told that would be managed by Vanguard?

Can I keep these 2 separate accounts? or should I rollover to new employer account? What is advisable?

Also, for rollover, should I talk to Fidelity to do? And will it only be done once I join Google? And with rollover, are there any disadvantages?

#personalfinance #investments

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TOP 25 Comments
  • Roll it over to an IRA instead. Funds in an IRA can be used as you please (of course penalty + tax will apply on withdrawal and it's usually not a good idea to withdraw early), unlike a 401K and an IRA opens up more investment opportunities than a typical 401K.
    May 29, 2021 6
    • Amazon
      LWCb73

      Go to company page Amazon

      LWCb73
      So if you want to keep the backdoor option open with the new employer, besides keeping both 401k accounts open, what are the other options?
      May 29, 2021
    • Google
      yWjo50

      Go to company page Google

      yWjo50
      Your other option is to rollover into your new plan. It's maybe 1-2 phone calls and a print/scan of work. Both sides will be very helpful.

      I have a fidelity (msft) and the vanguard still because I had a 401k loan when I went changed. It's not a big deal to have both.

      I think it's possible for your old 401k administrator to charge an fee. In that case you should definitely roll it over. I don't know Amazon's plan details, but my Microsoft 401k does not charge this fee.
      May 29, 2021
  • You can keep both accounts, the only advantage to rollover is when the new company's 401k plan has better option to invest, otherwise you can only get the advantage of less account to manage.
    May 29, 2021 0
  • AbleTo
    10xenginer

    Go to company page AbleTo

    10xenginer
    There really is no reason to rollover your 401k unless you have specific investment goals that your previous 401k cannot meet. There is an argument to have all your money consolidated so you don't lose track of it, but there are apps like personal capital or mint that will track your money across accounts. If you are rolling it over to an IRA just to rebuy the same mutual funds you already had in the 401k its kinda pointless and you expose yourself to market risk and credit risk. Rollovers require converting shares to cash and sending a check to the new IRA/401k, which can happen on a down day and lead to sell low/Buy high scenario. You also lose creditor protections of a 401k .
    May 29, 2021 4
    • AbleTo
      10xenginer

      Go to company page AbleTo

      10xenginer
      @Five9 OP isn't at a garbage startup with shit investment options. It's Amazon. The funds in their 401k are likely just as good as any funds you'll find in an IRA. Probably even better. Large companies have access to institutional/class A funds which typically have a lower ER compared to non-institutional funds available in an IRA. In any case if you are rolling over to buy AMC shares/call options then by all means, but if you are rolling over just to rebuy mutual funds then I struggle to see the benefit.
      May 29, 2021
    • Tesla
      xcmg85

      Go to company page Tesla

      xcmg85
      I found a reason. The fees to manage my 401k at my old company were a low % of my total account value. While employed that fee was covered by the company as part of benefits. After leaving, was surprised how much of a burden that fee was when I had to cover it myself so did a 401k transfer to save it.
      May 30, 2021
  • Google
    diffusers

    Go to company page Google

    diffusers
    Everyone on this thread is wrong.
    Google has one of the best 401k plans, just roll your Amazon plan into it. Vanguard makes it super easy.
    May 29, 2021 2
    • Yahoo
      yOjl47

      Go to company page Yahoo

      yOjl47
      What’s so good about it? Ours offers 6% match plus 3% profit match (total of 9% of salary and bonus) with auto-Roth conversion (no taxes on megabackdoor). Ultra low fees on vanilla funds (less than 0.02%). It’s like getting smacked with stacks of cash.
      May 29, 2021
    • Google
      diffusers

      Go to company page Google

      diffusers
      Google matches up to 9750 and you can get the match early in the year. So, most of us put our bonus into the 401k plan in Jan itself.
      May 29, 2021
  • Google
    zoOk83

    Go to company page Google

    zoOk83
    Check out Capitalize (https://www.hicapitalize.com/). They'll help you roll over your Amazon 401k for free so you can consolidate your retirement accounts into one place.
    May 29, 2021 1