401(k) Rollover Coach

When to roll over

• You changed jobs.
• You retired.
• Your old 401(k) has high fees (over 0.5% expense ratio).
• Your old 401(k) has limited investment options.
• You want everything in one account for simplicity.

Your options for an old 401(k)

• Leave it — fine if it has good low-cost funds (under 0.20% expense ratio).
• Roll to NEW employer\'s 401(k) — keeps things simple, but only if new plan is good.
• Roll to IRA — most flexibility. Open at Vanguard, Fidelity, or Schwab.
• Cash out — DON\'T. 10% early-withdrawal penalty + income tax. Easily 30-40% gone.

Step-by-step rollover to IRA

1. Open an IRA at Vanguard, Fidelity, or Schwab. Free, 10 minutes.
2. Match the type — Traditional 401(k) → Traditional IRA. Roth 401(k) → Roth IRA.
3. Call the new IRA company\'s rollover desk. Tell them you want a "direct rollover" from your old 401(k).
4. They tell you what to send. Usually:
   • Call old 401(k) plan, request rollover paperwork.
   • Have the check made payable to the NEW custodian, not you.
   • The check shows your name "for benefit of" — meaning you don\'t cash it.
5. Old plan mails the check. You forward it to the new IRA company. Or it goes directly.
6. New IRA shows the funds. Pick investments.
7. Done. You have one consolidated retirement account.

After consolidation — pick investments

For most retirees, three simple options:

• Target-date fund — picks "VFFVX 2025" or similar. Auto-balances stocks/bonds for someone retiring near that year.
• Three-fund portfolio — total US stock + total international + total bond. Done.
• Vanguard Personal Advisor — 0.30%/year. They invest for you.

Look out for sales tactics

When rolling over a big balance, brokers often want to sell you ANNUITIES or LOADED MUTUAL FUNDS. Both have high fees and rarely outperform simple index funds. If a broker pushes annuity into a Traditional IRA — RUN. That\'s tax-deferred protection inside an already tax-deferred account = pointless and expensive.