I recently changed employers. In the past, I have rolled my 401(k) into my new employer's plan, but this time I am considering rolling it into an IRA.

Does anyone have advice on doing this? What are the pitfalls (I understand the tax implications of not moving the money directly)? How should I go about chosing funds or stocks? That is, should I put everything into funds immediately or move the funds into a MM first and move cash slowly into funds? Should I perhaps leave it in my old employer's 401(k)?

This is new to me and I am hoping to get some good advice from you all.

Regards,
Jeff Williams

Jeff,
From all that I have read on this topic (and it is a good
question), unless your previous employer or your new
employer has a good 401k plan, most suggest that you roll
over the funds from the previous employer to a self directed
IRA,.

A "good" 401k plan is one that gives you a choice of
investments, all of which have low expenses. It is
sometimes difficult to know what expenses you are paying in
a 401k, so it may be hard to know how the plan from your new
employer rates.

If you choose to roll over to a self directed IRA you will
have the flexibility of choosing your investments which is
the primary advantage of taking money out of 401k plans.

Regarding your question about what to invest in -- if you
have a diverse selection of investments in your current
401k, there would be no reason not to try to duplicate that
diversification in an IRA. Look for low expense funds to
invest in. Big fund families like Vanguard, TR Price, and
FIdelity give you lots of choices. If you basically move
to the same types of investments, you avoid trying to guess
where the market is going.

Hope that this helps.

Dave Swierenga

jeff1851@charter.net wrote:
>
> I recently changed employers. In the past, I have rolled my 401(k) into my new employer's plan, but this time I am considering rolling it into an IRA.
>
> Does anyone have advice on doing this? What are the pitfalls (I understand the tax implications of not moving the money directly)? How should I go about chosing funds or stocks? That is, should I put everything into funds immediately or move the funds into a MM first and move cash slowly into funds? Should I perhaps leave it in my old employer's 401(k)?
>
> This is new to me and I am hoping to get some good advice from you all.
>
> Regards,
> Jeff Williams