Rolling over old 401k into Vanguard @Amazon

Amazon / Data
kublakhan1

Go to company page Amazon Data

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kublakhan1
Apr 2, 2018 14 Comments

Hi guys! I have some money in a 401k from my first job in fidelity. It is currently invested in a target 2050 fund. Was wondering whether I should roll it over to Vanguard 401k? Also, will it be benefitial to move it to a Roth Ira? Thanks in advance!!

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TOP 14 Comments
  • I'm assuming this is a pre-tax/traditional 410k. If so, it doesn't make sense to convert it to a Roth IRA.

    You have 4 options:
    1) Withdraw & pay penalty: not recommended unless you are cash strapped
    2) keep it as is, with your previous employers custodian
    3) convert to traditional IRA
    4) rollover to Amazon 401k

    (2) is a good option if you are happy with the offering from your previous employer. It does mean you'll have one more account to manage though.

    (3) vs (4) is a question of whether you're happy with Amazon's offering. If yes, roll over to Amazon. If no, convert to tira where you can choose whatever you like.
    Apr 2, 2018 3
    • If you convert to a IRA you'll be capped a $5,500 in contributions a year, 6,500 if you're over 50 but 401k's are $18,500 max, in 2018, contributions a year, just heads up if you try to go from 401k to IRA
      Apr 2, 2018
    • This is not true. You can continue to contribute $18500 to your current 401k even after rolling over your previous 401k to IRA.

      There are no "one size fits all" benefits of converting to IRA. It all depends on your own personal situation, offering of previous & current employer. I'm assuming since you work for Amazon, you have a decent 401k plan since larger companies tends to have better 401k. In that case, your better off rolling over to the current 401k.

      If your current 401k offering is not good, converting to an IRA gives you access to all funds, which is beneficial.

      However rolling over to a 401k also has few disadvantages:
      1) 401k are subject to "required minimum distribution", whereas certain IRAs are not
      2) most 401k plans have a restricted set of available investment options, while IRA gives you access to a wider range of available investments
      Apr 2, 2018
  • Amazon
    2nd best

    Go to company page Amazon

    2nd best
    Employer 401k is usually better than individual traditional IRA. Employers negotiate to get better rates. You should rollover old funds to Amazon 401k
    Apr 2, 2018 1
    • Amazon / Mgmt
      BakBown

      Go to company page Amazon Mgmt

      BakBown
      IRAs give you far more options. Amazon’s 401K has a dozen options or so. An IRA is a brokerage account and gives you most every mutual fund as well as individual stocks. Heck, rolling it into a Vanguard IRA gives you access to most of their low cost mutual funds.
      Apr 2, 2018
  • Just leave it for diversification unless you’re that lazy to have two accounts. Fidelity is amazing
    Apr 2, 2018 1
  • Oracle
    Marx Herd

    Go to company page Oracle

    Marx Herd
    Don't convert to an IRA. You will NOT be able to do a "backdoor Roth" if you do.
    Apr 2, 2018 2
    • Oracle
      Marx Herd

      Go to company page Oracle

      Marx Herd
      Also, the "glide path" comment is a very good one if you're the set it and forget it type. Some of the target date funds have too conservative a mix, or, too much bonds in the portfolio. That will cost you in the long run as sub par performance lagging the market. Check out paulmerriman.com/amazon for his recommendation on the mix between funds at your 401k. Poke around the site. You will likely learn a lot.
      Apr 2, 2018
    • Oracle
      Marx Herd

      Go to company page Oracle

      Marx Herd
      BTW, that website is not mobile friendly, so check it from a desktop.
      Apr 2, 2018
  • Amazon
    Xkmm52

    Go to company page Amazon

    Xkmm52
    If I were you I would rollover that 401k to the vanguard ira. Then invest in their retirement fund as vanguard funds have extremely low fees in comparison to fidelity (.05% vs 1-3%).

    Are you sure you are allowed to rollover to your vanguard 401k? I thought usually there are restrictions so ira would be the best option.

    Iras also usually give you better investment choices so if you want to start investing in single companies there may be better brokerage options than vanguard.

    Some people mentioned above there are restrictions in rolling over to an ira. Not true if the money is pre tax 401k contributions
    Apr 3, 2018 0