I have a 401K from a previous job that isn’t performing well. I want to invest in VOO or VTI, but my 401K doesn’t let me. Can I roll it over into my traditional IRA, or do I need to set up a different account? My current job doesn’t offer a 401K, so I opened a traditional IRA myself.
I’m mostly worried about taxes. Will I get taxed if I roll it over?
A few key things to know:
@esleystanley Right now, it’s in FOCKX, MVCKX, and GTSCX.
I’ll need to check the other options when I get to a computer.
I don’t see any management fees on my statements. I’m assuming they’re included in the stock prices.
@Alexander You should roll it over to an account where you have more control. I’m wondering if they’ve moved your funds to a cash account since you no longer work there. There’s no reason those funds should be doing poorly. But VOO or VTI are better choices.
No taxes on rollovers.
@Alexander Why do you feel like those funds aren’t performing well? From what I’ve seen, they’re in line with index funds. Some years they beat the index by a point or two, other years they fall behind a bit. Over a five-year span, they’ve outperformed the equivalent index funds.
You can roll it over to a Rollover IRA and invest in VTI or VOO. You won’t be taxed.
https://www.fidelity.com/retirement-ira/401k-rollover-ira-steps
@Happy Thanks for the link! I’ll take a look.
What other investments can you choose from in that account? I bet there’s an S&P 500 index fund. What are the fees like? If there’s an S&P 500 option with low fees, it might be worth sticking with it.
You can roll it into an IRA. Just follow the steps so it doesn’t count as a withdrawal. Your IRA provider can help you through the process. I always move my 401K money as soon as I leave a job. I prefer having more control.
If you follow the steps from your IRA provider, you won’t have any tax problems. Go ahead and do it.