I have a 401K question?

Question

I have a 401K program from another job and was wondering how to tell if the new job has a better 401K program and if I should keep the old one.I have almost no idea what to look for or how to find the answer.

Answer 1

Okay so bits and pieces of the other answers are correct yet incorrect. Here is the deal:

1. You can keep your old 401k at your work IF it is more than $5,000. If it is less than you will need to either roll it into your current employers plan or into a Roll Over IRA. So if it is less than $5000 you have NO choice but to roll it to your new 401k or Roll Over IRA.
2. I would say that given the chance of keeping it at your old employer's 401K, new employer 401k or Roll Over IRA, the best choice would be to set up a Roll Over IRA at a brokerage account. The reason being is that this give you tons of choice on how you want to use your money. You can put it into mutual funds, stocks, CD's, money-market accounts, etc. Most 401ks are pretty limited on what you can invest in and I bet both of your old 401k as well as your new one are limited in choice.
3. Now if you have more than $5,000 the ONLY reason you would keep your money at the old employer was it is in a mutal fund that you really like. Base on your answer this is probably not the case.


So my recomendation to you would be:

1. Take old 401k and roll into a Roll Over IRA at any brokerage account. A good one is Scottrade.com which is really cheap.
2. Sign up with your new employee's 401k and make sure to contribute as much as you can. At the very least, make the minium contribution in order to get the full employee match if they offer one. This is KEY!!! Basically the company is rewarding you for saving money so TAKE ADVANTAGE OF IT. Ask your HR for more information.
3. Once you set up a 401k with the new employee, since I don't know your situation, in general it is best to invest in a mutal fund that is in the plan that is similar to market index. This is complicated so I would ask your HR or the company that runs your companies 401k if they have something similar to this.

Good luck, but do not neglect in saving for your future. Hope that helps.

Answer 2

You can not keep the 401-k from your old job. It should be rolled out into a self-managed IRA with an investment broker. Once you roll it out, you have a limited number of days to get it into an IRA type investment or the government will consider it as cashed out and you will have to pay the IRS penalty. If you roll it, you still report it on your tax form but you show it out and then back in so there is no penalty.

As for your new company's 401-k, any 401-k is better than none at all. The only negative I can think of is if the company is requiring the contributions to be made in its (the company's) own stock. Hopefully the company will give you a list of mutual funds from which to pick that have varied investment risk/reward ratios and they will match a certain percent for every dollar you contribute.

Answer 3

Most 401K prgrams roll over when you get a new job, so you keep putting money into the same 401K. See how much the new job will match. (Like they put in a certain amount according yo how much you put in out of your check.) Human Resources will know all the answers.

Answer 4

You will not be able to keep your previous 401k.

You will have to roll it over into another investment like an IRA or Roth IRA.

Investigate what your employer offers as far as funds to invest in and whether or not they match your savings.

Some employers match up to a $1 for $1 up to 6% or other figures.

Check out the link below for more assistance
http://www.401khelpcenter.com/mpower/feature_050801.html

Answer 5

You do both. Keep your old 401 and start a new one at your new employer. If you like the new employers plan you can transfer the assets from the old plan to your new plan.