should I merge all 401k accts? if so, how? will i lose money? And what is a good company to keep the fund?

Question

i have several 401k accts with various companies. i would like to consolidate. will i lose money during suc transaction?

Answer 1

It makes sense to have them in one spot so that you can easily manage all of the funds and choose an appropriate asset allocation for your needs. If your current employer has a 401k that you are eligible for, it usually makes sense to roll it over to your current employer's plan since you cannot roll funds out of the plan that you are currently in until you terminate employment or retire.

If you are not eligible for the 401k at your current employer, I reccomend opening an IRA at Vanguard. I work for a direct competitor of Vanguard, but I still believe they have better solutions for individuals (I know, I should go work for them).

If you are not a saavy investor, make it easy on yourself by investing in an "Asset Allocation Fund". The Vanguard funds are called "Target Retirement 20xx". You choose the year that is closest to the one in which you will retire. The fund manager wraps many funds into a single Target Retirement investment that is suitable for someone who is retiring in that particular year. Lets say you intend on retiring in 2035. Choose the Target Retirement 2035 fund. As we get closer to 2035, the investment gets gradually more conservative. Many fund houses have similar types of investments. These are hands down the best investments for people who don't want to waste their time picking out individual funds that suit their needs.

Good Luck

Answer 2

Yes, think of it like this, you are the CEO of your retirement. Do you want to manage one company/contractor or several? Me, I would want one that has access to many different baskets or tools so they could help me select the one that is most effective and fee efficient. A fee based broker would be able to assist you.

You will be rolling the 401ks into IRAs, or consolidating them into a 401k.

Answer 3

Diversification is recommended.

If you merge any of it send the money directly to the institution so you are not penalized 10%, plus possible higher tax bracket.

Answer 4

You should talk to your person at the fund that has done the best job for you to see about rolling other accounts under one umbrella. Something to think about, however, is whether it is wise to put all your eggs in one basket?