My accounts go back to about 2007.
If I have a 401(k) from three different jobs, but they’re all viewable in a single, Fidelity account, is there any benefit to rolling them into a single 401(k) for my current employer?
byu/XxFezzgigxX inpersonalfinance
Posted by XxFezzgigxX
9 Comments
No real benefit aside from seeing it all in one account/pile.
make sure the older ones arent getting hit with “inactive” or “book keeping” fees; that would be the only significant reason to combine them
another legit reason is eas of management and asset allocation. instead of figuring out allocation as a sum of all accounts (if not identical) everything can be right there in one
Depends on the fees and the fund choices.
I still have my first 401k because it’s great. Not all are great.
If any individual balance is under $7000, there’s a chance your ex-employer could close out the account without your input. This usually triggers 60 days after termination, but plans do vary on the length of that timeline and the dollar threshold (but would have to be smaller). It’d still be your money, it’d end up either as a cash-out check (under $1k) or rolled into an IRA in your name ($1k-$7k), probably still at Fidelity.
Consolidating balances could avoid account fees. Many employers will cover those while you work for them, but once you leave those become your responsibility. Rolling these balances into your current 401k may get rid of those. IIRC Fidelity’s pretty low in terms of account fees, usually a flat rate per quarter. $20-30 quarterly seems average, but would depend on the features of each particular plan. So this wouldn’t be a catastrophe leaving those old accounts alone, but every little bit you can keep in your balance helps.
Plans can also vary around what investment funds are offered. If your current plan has ones allowing you to better build your desired portfolio, that’d be another reason to consolidate.
Either way, there likely isn’t a huge difference either way, just a matter of convenience, fee reduction, and fund selection.
Roll them all into an account that’s not connected to any employer
I’m in the same position. I haven’t seen a reason to change
Your new 401k may have lower fees or terms. You can view them all together because your social security number is linked to one Fidelity Netbenefits username.
Double check for increased recordkeeping or maintenance fees for employer accounts where you no longer work.
Also ensure your contact information is updated on each account individually, not just on netbenefits overall. Most accounts are setup with your corporate email and phone as the default contact method, which means you won’t receive notice if your old employer is switching providers.
Personally i’d combine them to make managing allocations and rebalancing easier, unless your new plan has horrid options
Rule of 55 deductions are applicable to the current 401k only when you leave your job. So if you roll all of them into the current makes the total amount eligible. If that is important to you and you can roll them all into your 401k with your current employer, i’d do that unless the fees/funds are terrible.