So it’s time to decide whether I should keep my 401k money at the original manager Fidelity, or roll it over to join my IRAs at Vanguard. I have enough in there to be allowedto leave it indefinitely. I’m not considering any other options as I’ve already chosen Vanguard as my retirement broker. Here are the funds I have in my Fidelity 401k right now, with expense ratios (e.r.):
40% in S&P 500 Index Fund (like FSMKX), e.r.=0.10%
20% in Spartan Extended Market Index Fund (FSEMX), e.r.=0.10%
20% in Spartan International Index Fund (FSIIX), e.r.=0.10%
20% in PIMCO Total Return Admin Fund (PTRAX), e.r.=0.68%
I list the expense ratios because as I only invest in index-type funds, expense ratios are one of the major ways (but not the only way) to predict performance.
Option #1: No Rollover, Stay with Fidelity
- Only really looking for index funds, and Fidelity has decent ones that currently have really low expense ratios of 0.10%. These Spartan funds usually have a minimum opening balance of $10,000 each to get such low expense ratios.
- Don’t have to file any paperwork
- No maintenance fees or extra costs.(?) Have to double-check this.
- Limited choice of funds, especially no low-expense ratio bond funds.
- Low expense ratios are only temporarily capped at 0.10%, and may go up later.
- IRAs have better estate planning benefits when you die. Beneficiaries can make withdrawals gradually, keeping the rest in the tax-deferred IRA. You can’t do this with 401ks.
…will finish this later after looking into my Rollover IRA alternatives at Vanguard.
(Continue reading the rest of this in Should I roll over my 401k? Part 2 – Maybe Rollover into Fidelity?)
By Jonathan Ping | Retirement | 8/1/05, 9:31am