Roll Over IRA

[Stuck_At_Work]

I don't like the investment options my company offers for my 401k. I would like to roll it over into an IRA at my bank. What are the pros/cons of doing this?

For starters, I would roll over enough money into this bank IRA to qualify for a Premier account with them. There are no fees - simply a minimum amount of money invested through them. The main perk is free brokerage trades (100/year) which would remove the overhead of any future stock/fund transations.

 

[brntorng]

Your company permits you to roll money out of your 401K and into an IRA while you're still employed with them?

 

[homer]

yeah, never heard of this. a company benefits from having a large collective employee 401k portfolio -- reduces overhead costs. if a company allows rollovers of active portfolios, they'll bleed out.

besides, is this even legal? to be fair, i don't see why not. but i've never really heard of this. so maybe against the law? or just simply financial sense.

(not an accountant. not a financial advisor. mainly speaking out of my ***).

 

[homer]

ok, seems difficult to do.

foremost, your company must allow this. then, only allowed with pre-tax dollars (match money can't be moved, excess contributions can't be moved) unless you're close to retirement. if you rollover, your company can penalize you -- an example given is that no more contributions for the next 12 months. wow. thats a pretty harsh penalty. The Link

 

[Stuck_At_Work]

You guys are right. They do not allow this. Ignore this thread...

 

[AstroVol]

If you're not happy with your options, tell someone at your company who can do something about it. And lobby your co-workers to do the same. It can't hurt.

I work for a small engineering firm, and Mrs. AV works for a Fortune 500 company, and they each recently added an S&P 500 Index Fund to our 401k plans in the last year. At my firm, I mentioned the index fund idea to both our company president and the lady in our office who sets this stuff up, and not only did they add an index fund, they added a Roth 401k option.

It is in the best interest of your company for their employees to put as much $$$ into their savings plan as possible, so it's likely that they'll at least listen to you if they think it means you will contribute more.