For a new joiner, would y'all leave your 401k with the previous employer or rollover to Fiserv's?
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Most people aren't going to run into Roth income limits, especially if you're smart about it and minimize your AGI by maxing out your current traditional 401(k) and HSA contributions.
Roll previous employer's 401(k) to Fiserv's 401(k) and invest the funds in an S&P 500 index fund with an expense ratio of 0.03%. Do not roll it over into a traditional IRA -- you'll be destroying your ability to do backdoor Roth conversions if you ever want to contribute to a Roth IRA while over the salary limit. Do not roll it over into a Roth IRA as you'll have to pay the taxes on those contributions now, while you're presumably in a higher tax bracket right now than you will be in retirement, when you can take the tax hit at lower rates.
@kv depending on your age and tax bracket now, along with the amount you want to convert, you may pay a lot more in taxes than if you wait til you retire when you have lower earnings. You may be able to maximize Roth conversions at much lower tax brackets after retirement. Check with a financial planner or watch YT videos - Peak Financial is especially educational on retirement planning, including withdrawal strategies and managing taxes.
Rollover!
Vanguard
Fidelity
Schwab
Consider these. They are ordered in what I feel are the best choices..
If you are already in a high tax bracket it might be a good time to roll it over to a Roth IRA. Pay those taxes now. For new contributions choose the Roth 501k. For many years a Roth 401k wasn’t an investment option at Fiserv/First Data. Take it from someone with experience: the tax savings today in a 401k are much less than the taxes you’ll pay when withdrawing that money in the future. Pay those taxes now. Go into the Roth 401k. Pay no taxes when you retire and have no income.
I recommend rolling over your prior 401(k) to IRA so you have full control over the investments and avoid 401(k) provider fees. Don't let Merrill hold you captive.
@b0 yikes. Checks? aren’t they one of our clients? Can’t they use Fiserv’s cutting edge modern payments rails?
Depends on the fees and investment choices from the previous employer.
In general I view Merrill Lynch negatively, so I would lean to the previous employers 401K provider.
But if the previous employer had issues, maybe it would be better to keep your 401K all in one account. That will make it easier to roll over to the next 401K provider when you leave Fiserv for a better employer.
Merrill preforms a roll over by writing a check and mailing it to the next provider. So your money may be out of the market for several weeks.
You are aware that you can roll over your IRA/Roth IRA to any fund you desire after leaving your previous employer right?