[Mosaud1998]

Originally Posted by DrVenture

All good, but keep an eye on the "professionally managed" aspect. It may be more beneficial to go with a passive S&P fund or passive large cap growth fund. Don't assume that these "pros" will be trading or adjusting regularly in real time. They will pick a set & forget allocation and adjust annually, according to programmed instructions, and not always at the best times.

Pro managed usually means higher fees and often lower returns. They will "deworsify" into things that hurt returns, such as foreign stocks or bond funds.

No fees until I don't have 25k+ in the account

[chassis]

Originally Posted by Mosaud1998

If I remember correctly, the empower rep said she'd cut a check to me so I can deposit the check into my fidelity 401k. So, I'm assuming empower was going to hold 20% for taxes. Of that's still the case, I'll just keep the money that's in empower. It's not harming anything.

There is a miscommunication going on.

You can’t make a deposit into a 401k except via payroll deduction. Ms. Empower either gave you bad information or you may have misunderstood.

Once Empower cuts you a check, they don’t care what you do with the money and where you can or can’t invest it.

You can rollover from Empower to a Fidelity IRA. IRAs have similar treatment as 401ks under tax laws but they are not the same.

[Mosaud1998]

Originally Posted by chassis

There is a miscommunication going on.

You can’t make a deposit into a 401k except via payroll deduction. Ms. Empower either gave you bad information or you may have misunderstood.

Once Empower cuts you a check, they don’t care what you do with the money and where you can or can’t invest it.

You can rollover from Empower to a Fidelity IRA. IRAs have similar treatment as 401ks under tax laws but they are not the same.

I'll call Empower tomorrow morning and figure it out

[kscarrol]

Originally Posted by Mosaud1998

I'll call Empower tomorrow morning and figure it out

Do that. Transferring from your 401k to an IRA is not a withdrawal and there are no taxes owed.

[Mosaud1998]

Originally Posted by kscarrol

Do that. Transferring from your 401k to an IRA is not a withdrawal and there are no taxes owed.

I just tried initiating a transfer from my Empower over to Fidelity online. I can do it, but for some reason, I can't transfer the full balance. I have approximately $10,000 in the Empower account. When I initiate a rollover, it shows my vested balance is $8,300, not $10,000. It shows that my ROTH balance is $7,500 and my pre-tax balance is approximately $800.

Where the hell did the $1,700 go?

[XutvJet]

Originally Posted by Mosaud1998

I just tried initiating a transfer from my Empower over to Fidelity online. I can do it, but for some reason, I can't transfer the full balance. I have approximately $10,000 in the Empower account. When I initiate a rollover, it shows my vested balance is $8,300, not $10,000. It shows that my ROTH balance is $7,500 and my pre-tax balance is approximately $800.

Where the hell did the $1,700 go?

Because you're not fully vested yet so some of that money is withheld if you transfer it to an IRA or 401k not associated with Empower.

Also, absolutely DO NOT let your account be "professionally managed". That is code for high fees that will leave you with an under performing account. Buy S&P 500 index funds and YOU make the decisions and manage the account. Believe us here.

[Mosaud1998]

Originally Posted by XutvJet

Because you're not fully vested yet so some of that money is withheld if you transfer it to an IRA or 401k not associated with Empower.

Also, absolutely DO NOT let your account be "professionally managed". That is code for high fees that will leave you with an under performing account. Buy S&P 500 index funds and YOU make the decisions and manage the account. Believe us here

Because you're not fully vested yet so some of that money is withheld if you transfer it to an IRA or 401k not associated with Empower.

So, I guess either way I'll loose the 1700 if a roll over the money?

Also, absolutely DO NOT let your account be "professionally managed". That is code for high fees that will leave you with an under performing account. Buy S&P 500 index funds and YOU make the decisions and manage the account. Believe us here

I guess I'll withdraw out of that tomorrow. I'll just call them and ask them to take me out of the "professionally managed " option. But, I don't know where to put the money

[chassis]

Originally Posted by Mosaud1998

So, I guess either way I'll loose the 1700 if a roll over the money?

Unvested funds were never yours to begin with, so you haven't lost anything. They haven't vested. If they are unvested, the funds don't belong to you.

Originally Posted by Mosaud1998

I guess I'll withdraw out of that tomorrow. I'll just call them and ask them to take me out of the "professionally managed " option. But, I don't know where to put the money

Agree, do not use a managed or advised account feature. Put money into an S&P 500 index fund, for example SPY.

[Mosaud1998]

Alright, so I went to my employer's 401k program on Fidelity. There are two different options: pre-tax and ROTH. I am unsure if the 3% match is on the pre-tax or Roth.

Sorry for all the questions..

[zx10guy]

Clarify with your HR department. But I'm going to say the match is done regardless of if you contribute to the traditional (pre tax) or Roth 401k or both. I'm also going to say the 3% match your employer is going to contribute is going to be made as a pre tax contribution as they'd have to pay the taxes (or you) if they do it as a Roth contribution.

As I said in one of my posts above, my employer has both options. I'm currently contributing to both pre-tax and Roth. My employer's match (6%) is only done as a pre-tax contribution.

[Mosaud1998]

Originally Posted by zx10guy

Clarify with your HR department. But I'm going to say the match is done regardless of if you contribute to the traditional (pre tax) or Roth 401k or both. I'm also going to say the 3% match your employer is going to contribute is going to be made as a pre tax contribution as they'd have to pay the taxes (or you) if they do it as a Roth contribution.

As I said in one of my posts above, my employer has both options. I'm currently contributing to both pre-tax and Roth. My employer's match (6%) is only done as a pre-tax contribution.

I just spoke to HR. Employee match is only done as pre-tax. I just went with 4%. 2% in Pre-tax and 2% in ROTH 401k. Empower charged me $115 for a rollover. Too late now. I already requested a check.

[Vindicator3]

The employer match funds will be pre-tax, but as long as you qualify for them if your contributions are pre-tax or Roth, it probably isn't best for you to split your contributions like that. The lower your current tax bracket, the more likely it's best for you to make all of your elective contributions to the Roth option, and the higher your current tax bracket, the opposite. You normally can adjust these whenever, so you can set them at 2 and 2 today and change to 4 and 0 tomorrow or next month, etc. Changes only apply going forward, obviously.

$115 rollover fee sucks but it's a lot better than $1700 or whatever the "fine" was.

Your next project is to bump that 4% total contribution up over time, along with putting the $7k annually into a Roth IRA assuming you qualify.

As someone said above, congratulations on having this approach at all while in your 20s - you will be glad you did when you are older!

[chassis]

Originally Posted by Mosaud1998

I just spoke to HR. Employee match is only done as pre-tax. I just went with 4%. 2% in Pre-tax and 2% in ROTH 401k. Empower charged me $115 for a rollover. Too late now. I already requested a check.

You are rolling Empower into Fidelity, correct?

[Mosaud1998]

Originally Posted by chassis

You are rolling Empower into Fidelity, correct?

Yes, rolling empower to fidelity.

[chassis]

Originally Posted by Mosaud1998

Yes, rolling empower to fidelity.

Well done. Hopefully you will find that Fidelity is a good custodian that offers a large portion of your services needs.

When you leave your current employer, bear in mind you are normally not required to rollover your account to a new custodian if the account balance reaches a defined level. This means you can stay with Fidelity for a long tome, which means simplicity and familiarity for you. I use Fidelity as a one-stop shop and am fully satisfied. Fidelity does not directly offer loans or credit cards, and I use other providers for those services. Fidelity offers fee-free debit cards if you do not use a credit card.

[Bc2005]

I had a Fidelity 401k with my employer, and it had a somewhat limited set of fund choices for our investment. Not long after I retired I converted it into a Fidelity IRA because then I could access the full offerings by Fidelity. The conversion from 401k to IRA was free and all the funds just directly transferred. Very simple, and no fees.

[XutvJet]

If it were me, I'd only invest in the company 401k up to the match and then open an account at Vanguard and take whatever you wanted to invest in addition to the match and open a brokerage account and have full reign to invest in what you want. IMO, from 20-40ish, it should only be S&P 500 index funds and nothing else. Once you get to 40, then consider some bond funds and maybe a few stocks here and there.

See Warren Buffett's 15 minute retirement plan. It can't be any more simple than that and wildly successful over time. It sure as hell has worked extremely well for over the last 13 years. Prior to that, I didn't know any better and was invested in expensive high fee actively managed funds, had a financial planner, etc. I read up, fired my advisor, went to almost all S&P 500 index funds for 10 years, managed everything myself and my portfolio has grown so much and so rapidly that I could retire at 50 right now if I had to/wanted to.


https://www.fool.com/investing/gener...ment-plan.aspx

[MaxVO2]

Originally Posted by XutvJet

If it were me, I'd only invest in the company 401k up to the match and then open an account at Vanguard and take whatever you wanted to invest in addition to the match and open a brokerage account and have full reign to invest in what you want. IMO, from 20-40ish, it should only be S&P 500 index funds and nothing else. Once you get to 40, then consider some bond funds and maybe a few stocks here and there.

See Warren Buffett's 15 minute retirement plan. It can't be any more simple than that and wildly successful over time. It sure as hell has worked extremely well for over the last 13 years. Prior to that, I didn't know any better and was invested in expensive high fee actively managed funds, had a financial planner, etc. I read up, fired my advisor, went to almost all S&P 500 index funds for 10 years, managed everything myself and my portfolio has grown so much and so rapidly that I could retire at 50 right now if I had to/wanted to.


https://www.fool.com/investing/gener...ment-plan.aspx

****Investing in Berkshire-Hathaway (Warren Buffetts "fund") has done well for me these past 6 years or so. My cost basis is quite low and I purchased several chunks of BRK-B over the years as it ebbed and flowed. It's done better for me than the S&P 500 Index Funds I also own and have contributed to over the years. Diversity and all that..

Really happy with BRK-B compared to other investments (Beanie Babies, Tulips, Cheese of the month club, etc..)

5 year performance of BRK-B vs S&P Index below.

[XutvJet]

Originally Posted by MaxVO2

****Investing in Berkshire-Hathaway (Warren Buffetts "fund") has done well for me these past 6 years or so. My cost basis is quite low and I purchased several chunks of BRK-B over the years as it ebbed and flowed. It's done better for me than the S&P 500 Index Funds I also own and have contributed to over the years. Diversity and all that..

Really happy with BRK-B compared to other investments (Beanie Babies, Tulips, Cheese of the month club, etc..)

5 year performance of BRK-B vs S&P Index below.

Totally agree!!!! Berkshire Class B is exceptional. About 25% of my portfolio is in it. I just figured for a young person starting out, maybe keep it has simple as possible for a bit to get comfortable with learning everything. The only other stocks I buy are with some "what the hell" money where I buy about $5k to $10k of something for fun every few years.

[Vindicator3]

Originally Posted by chassis

Fidelity does not directly offer loans or credit cards, and I use other providers for those services.

Not a direct offering, but Fidelity does sponsor a credit card that has nice cash back if you deposit the cash back into a Fidelity account. If you prefer cash back to airline or other points, it's a good option for many categories of purchases.

https://www.fidelity.com/spend-save/visa-signature-card

[Vindicator3]

Originally Posted by XutvJet

If it were me, I'd only invest in the company 401k up to the match and then open an account at Vanguard and take whatever you wanted to invest in addition to the match and open a brokerage account and have full reign to invest in what you want. IMO, from 20-40ish, it should only be S&P 500 index funds

I have to disagree here. I agree with the index fund advice, but that excellent advice pretty much negates the advantage of a taxable brokerage account giving you "full reign to invest in what you want." Some employer plans of course have terrible options, but most have at least a basic suite of index funds so if yours does then getting more investment options that you won't use is not a reason to forego the tax advantages of a 401k.

A 401k plan would have to be pretty bad for a taxable account to be preferable IMO, assuming liquidity is separately addressed and these are truly retirement funds, especially if the plan offers a Roth option and the investor is young and in a relatively low tax bracket compared to where they plan to be later in their career.

Roth IRA outside the plan (for those who qualify) vs Roth investing within the plan (once the employer match has been maximized) is a much closer call to me. Taxable accounts should be a last resort for folks who've matched out the tax-advantaged accounts, or used for funds that may need to be accessed prior to retirement, IMO.

[Mosaud1998]

Originally Posted by XutvJet

If it were me, I'd only invest in the company 401k up to the match and then open an account at Vanguard and take whatever you wanted to invest in addition to the match and open a brokerage account and have full reign to invest in what you want. IMO, from 20-40ish, it should only be S&P 500 index funds and nothing else. Once you get to 40, then consider some bond funds and maybe a few stocks here and there.

See Warren Buffett's 15 minute retirement plan. It can't be any more simple than that and wildly successful over time. It sure as hell has worked extremely well for over the last 13 years. Prior to that, I didn't know any better and was invested in expensive high fee actively managed funds, had a financial planner, etc. I read up, fired my advisor, went to almost all S&P 500 index funds for 10 years, managed everything myself and my portfolio has grown so much and so rapidly that I could retire at 50 right now if I had to/wanted to.


https://www.fool.com/investing/gener...ment-plan.aspx

The company match is 3%. I went with 4%. Meh, it doesn't make a difference. I was going to call Fedlity and get my ROTH IRA investments going, but yesterday at 4 p.m., I had the chills, and had a 103 fever, so that isn't happening.