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      12-26-2019, 12:29 PM   #1
Yugo
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401k rollover timing

Any of you all try to time the market when rolling over an old 401k acct? I just rolled over one of my old ones a couple of weeks ago thinking that market might take a small dip over the next few weeks, but there isn't one in sight.

Currently have the rolled over funds sitting in the account as cash uninvested. Thinking about indexing half and sitting on the other half waiting for a dip. Yea or nay?
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      12-26-2019, 12:35 PM   #2
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No, I haven’t. Depending on the scenario, you may be forced to decide sooner than you want. For example, if a company is defunct due to liquidation or has been purchased, your funds will be rolled into an IRA or you will be sent a check if you delay taking action.
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      12-26-2019, 12:38 PM   #3
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Originally Posted by Yugo View Post
Any of you all try to time the market when rolling over an old 401k acct? I just rolled over one of my old ones a couple of weeks ago thinking that market might take a small dip over the next few weeks, but there isn't one in sight.

Currently have the rolled over funds sitting in the account as cash uninvested. Thinking about indexing half and sitting on the other half waiting for a dip. Yea or nay?
Time in the market > Timing of the market.

If you love Vegas, then go for it. Realistically, though, the loss in earnings while sitting in cash accounts is probably going to be greater than any future gain you see if jumping in at a dip - unless you just end up lucky.

If that worries - put it all in various S&P500 ETFs and then wait a week or two for the market to climb slightly. After that, do a Sale Stop-limit order with the sale limit price being slightly over your basis and the stop at your basis. Set it for 'in effect for next 360 days'.

This way, if the market does take a huge dive, your shares will sell at your basis and then you can just repurchase at the lower price then.
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      12-26-2019, 12:39 PM   #4
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No, I havenít. Depending on the scenario, you may be forced to decide sooner than you want. For example, if a company is defunct due to liquidation or has been purchased, your funds will be rolled into an IRA or you will be sent a check if you delay taking action.
I believe he is talking about moving it into an IRA or new 401K, but leaving it as cash available for trading, rather than purchasing specific stocks or funds. Not actually leaving it where it is currently.
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      12-26-2019, 12:45 PM   #5
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Correct, money is already moved from old employer into a traditional IRA with etrade.
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      12-26-2019, 01:53 PM   #6
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IRA is the way to go don't move it to your current employers 401k.
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      12-26-2019, 03:03 PM   #7
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Trying to time the market is never a good idea and nearly impossible. Also with a long-term horizon for retirement funds, any short term dip is meaningless in the scheme of things.
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      12-26-2019, 03:17 PM   #8
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No, I haven’t. Depending on the scenario, you may be forced to decide sooner than you want. For example, if a company is defunct due to liquidation or has been purchased, your funds will be rolled into an IRA or you will be sent a check if you delay taking action.
I believe he is talking about moving it into an IRA or new 401K, but leaving it as cash available for trading, rather than purchasing specific stocks or funds. Not actually leaving it where it is currently.
Put it in an IRA and put it in Apple. It is over $5 a share today and will likely top $300 by the end of the year.
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      12-26-2019, 04:48 PM   #9
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IRA is the way to go don't move it to your current employers 401k.
Hmm...It depends on the 401k. IMO.
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      12-26-2019, 04:57 PM   #10
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IRA is the way to go don't move it to your current employers 401k.
Hmm...It depends on the 401k. IMO.
You can purchase the same mutual funds in the 401k in an IRA. But you cannot purchase any mutual funds not in the 401k or individual stocks with a 401k. Seems like the IRA is better. I have unlimited free trades in my IRA. You do have higher contributions limits with 401k but that doesn't apply to rollovers, you can roll over as much as you want. (Rollover doesn't count towards contribution limits)
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      12-26-2019, 07:25 PM   #11
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Time in the market > Timing of the market.
This.
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      12-26-2019, 07:56 PM   #12
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Originally Posted by Run Silent View Post
I believe he is talking about moving it into an IRA or new 401K, but leaving it as cash available for trading, rather than purchasing specific stocks or funds. Not actually leaving it where it is currently.
Ah sorry, misunderstood, but agree with your previous post on trying to time it. Just invest. Time will work it out.
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      12-26-2019, 07:57 PM   #13
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Don't try for the top or bottom, just get the middle going up or down.
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      12-26-2019, 08:42 PM   #14
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Quote:
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Originally Posted by F32Fleet View Post
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Originally Posted by bimmer456 View Post
IRA is the way to go don't move it to your current employers 401k.
Hmm...It depends on the 401k. IMO.
You can purchase the same mutual funds in the 401k in an IRA. But you cannot purchase any mutual funds not in the 401k or individual stocks with a 401k. Seems like the IRA is better. I have unlimited free trades in my IRA. You do have higher contributions limits with 401k but that doesn't apply to rollovers, you can roll over as much as you want. (Rollover doesn't count towards contribution limits)
Ya, not a fan of that approach. I'd rather segregate 401k away from "the casino".

However, I can see why it would be advantageous for someone who is young and/or has poor investment options with the 401k of their new employer.
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      12-26-2019, 09:56 PM   #15
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Quote:
Originally Posted by F32Fleet View Post
Quote:
Originally Posted by bimmer456 View Post
Quote:
Originally Posted by F32Fleet View Post
Quote:
Originally Posted by bimmer456 View Post
IRA is the way to go don't move it to your current employers 401k.
Hmm...It depends on the 401k. IMO.
You can purchase the same mutual funds in the 401k in an IRA. But you cannot purchase any mutual funds not in the 401k or individual stocks with a 401k. Seems like the IRA is better. I have unlimited free trades in my IRA. You do have higher contributions limits with 401k but that doesn't apply to rollovers, you can roll over as much as you want. (Rollover doesn't count towards contribution limits)
Ya, not a fan of that approach. I'd rather segregate 401k away from "the casino".

However, I can see why it would be advantageous for someone who is young and/or has poor investment options with the 401k of their new employer.
You could just have the money in an IRA and put it into more conservative mutual funds and some more aggressive ones just like with the 401k but you have more investment options beyond that and can manage your own portfolio or pay someone to do it. I'm not that young but I like to be more aggressive in my investing as I'm not retiring anytime soon and the market is doing very well at the moment. I invest in the more aggressive mutual funds in my 401k plan but can't match the returns in my IRA. At best I'm getting maybe 25% return on the 401k vs. about 130% in the IRA, but of course I can lose money too, in both cases.
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      12-27-2019, 02:02 PM   #16
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You may spend your time better in comparing Roth IRA to traditional IRA. Depending on your situation a Roth could be a valuable option.
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      12-27-2019, 03:10 PM   #17
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You may spend your time better in comparing Roth IRA to traditional IRA. Depending on your situation a Roth could be a valuable option.
Yes Roth IRA and Roth 401k to me is the better choice. Pay taxes now rather than later when your nest egg is much larger and you owe a lot more. But if you already have a large amount in traditional just leave it there as your investment will grow faster than the taxes. Though you can also time the conversion to happen in a down market and spread it out over a few years to stay in a lower tax bracket.
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      12-27-2019, 07:40 PM   #18
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It's a chunk of money therefore don't like the idea of stripping almost a 3rd of it now by doing the Roth conversion.

Completely understand benefit of a Roth ira, but I like the idea of managing my taxes by withdrawing small increments out of traditional ira post 59 and a half.

Currently looking into a few diff mutual funds etf combos to invest the funds.
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      12-27-2019, 07:52 PM   #19
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That makes sense as the growth will be far greater than any taxes you pay if you're more aggressive . But if you're starting out it's better to just go Roth all the way. I only contribute to Roth 401k at work but my company gives a certain percent of my salary for free and it can only go into traditional 401k but it's free money so whatever. Outside of work I'm just contributing to a non retirement account if I do contribute which I haven't for some time as the portfolio is growing quite a bit just on it's own. I can set up auto transfers from my checking so I may start doing that to contribute consistently and also have any dividends automatically reinvest.
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      12-27-2019, 08:49 PM   #20
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Pay taxes now rather than later when your nest egg is much larger and you owe a lot more.
^^^^^ this. It happened to my parents. They never paid more tax than after they retired. You need to look at what you will be required to withdraw at age 70-1/2. And compare to your current tax situation.
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      12-28-2019, 11:22 AM   #21
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More money has been lost preparing for a correction than in the correction itself. Invest it all now in accordance with your asset allocation and never look back.
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      12-28-2019, 11:24 AM   #22
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Quote:
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IRA is the way to go don't move it to your current employers 401k.
Too many variables to make this kind of blanket statement. If I had money sitting in a TIRA, I would look at rolling it into my current 401k so I could continue to do backdoor and mega backdoor Roth conversions.
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