(Continued from Should I roll over my 401k? Part 1 – Stay put with old 401k?)
I just had a couple of very nice conversations with the customer service reps at Fidelity and Vanguard about rolling over my 401k into an IRA. I’ve always liked dealing with both these solid companies, they have short phone hold times even on their main lines (unlike E-Trade, which sucks), courteous people (again, unlike E-Trade), and they even speak intelligible English (unlike Dell)!
I cleared up some things with Fidelity first. I couple of commenters on my last post suggested simply rolling over my Fidelity 401k directly to a Fidelity IRA, so I explored that a bit. Here are my findings:
- The 0.10% expense ratios have been “permanently” changed to .10% for the Spartan funds. This was not reflected accurately on their retirement website. However, they can still be raised in the future, just as with any other fund.
- I confirmed that if I kept my funds in the 401k, there would be no maintenance fees of any time.
- If I do move over to a Fidelity IRA, my Spartan Extended Market Index Fund (FSEMX) and Spartan International Index Fund (FSIIX) would roll over directly and I would be able to avoid the usual $10,000 minimum initial investment. However, each of those funds has a low balance fee of $10 for balances under $10,000.
- The rest of my funds would be converted to cash and I would have to reinvest them. Thus, I would not be able to invest in their Spartan 500 Index Fund (FSMKX), unless I ponied up $10k.
- I could combine try to combine my S&P 500 funds and my Extended Market funds and get $10k so I could buy their Total Market fund (FSTMX).
Spartan 500 Index Fund 54.63%
Spartan Extended Market Index Fund 15.56%
Spartan International Index Fund 14.59%
Fidelity U.S. Bond Index Fund 15.18%
So, about 85% stocks, 15% bonds. All index funds. That’s about what I’m looking for. The expense ratio is 0.21%, temporarily capped. Not bad either! $10k minimum… This fund is very tempting. I’ll have to think about this one.
Oh, yes, Vanguard. I just asked if there would be any fees for a rollover (answer: No) and if I could merge my Rollover IRA with my existing Traditional IRA (answer: Yes if I wanted to.) Now to explore my Vanguard options. This is kind of fun!
(Read the next part, Should I roll over my 401k? Part 3 – Vanguard Options)
By Jonathan Ping | Retirement | 8/2/05, 2:55pm