Looking for a 401K Parking Spot

[annestacey]

I tend to do a lot of contract work and so I change jobs about every 1-2 years (when projects come to an end). I have a really good 401K with this current company that I started working for in December 2010 but I also have a 401K from the previous company I worked for (which includes two other 401K amounts rolled into it). So now I need to roll it over again but not sure I want to roll it over to the current company. I'm wondering where would be a good neutral location to keep it and avoid messing with it everytime I change jobs.

[Gardening Grandma]

Since your current 401K is a really good one, I'm curious as to why you wouldn't want to roll the old 401K into it? Then when you change jobs again, you'd just have the one that you could leave in place.

[annestacey]

When I say it's a good one, what I mean is that the employer match is really good. Maybe I don't fully understand all the details of a 401K but if the best option is to roll over to my current employer, then I'll certainly do that.

[Plain Old Petunia]

There are a few awesome 401k plans out there, but most are full of hidden fees which eat into your money. Over the years, the impact is dramatic.

Myself, I would open an IRA with a low-cost provider and roll my money there. If you buy ETFs, any broker who will give you free trades will do. If you prefer mutual funds, then stick with Vanguard or Fidelity.

[annestacey]

Can I roll over a 401K into an IRA? I guess I thought those were different animals.

[shooter47]

Yes you can roll over an old 401k into a traditional IRA. They are both tax-deffered retirement savings accounts just with different names. I second petunia's advice. Open a Traditional IRA at any of the low cost providers like vanguard, fidelity, etc. and invest in low cost index funds or ETFs.

[lisaa]

You should get the old 401(k)s away from your old employers. And I would keep the old 401(k)s away from you new employer too. You never know when your employer (old or new) will make a decision that impacts your financial future.

Your best choice is to open a traditional IRA at Vanguard, and roll all of your old 401(k)s into it. As you change jobs in the future, you can continue to roll over each 401(k) from each job into your Vanguard IRA.

My second choice would be a traditional IRA at Fidelity.

[MN-Investor]

When you open your IRA, talk to the company you are opening it at. Tell them you want to roll a 401(k) into it. They will help you. You want the transfer to go directly from 401(k) plan to IRA. You do not want to ever touch that money yourself.

[annestacey]

Thank you all for the good advice. I feel confident going forward with moving this 401K.

[workpublic]

T. Rowe Price is another good no load company

[annestacey]

I have opened an account with VanGuard and starting the rollover process. Thank you everyone for your help!