What could I gain from rolling over a 401(k) into an IRA while already in retirement?

I am retired from a large corporation after 30+ years. I have a 401(k) plus a rollover IRA from a pension buyout by my former employer. Both accounts are with Fidelity because this was the investment company my employer utilized. My current Fidelity advisor is pushing me to roll the 401(k), which is with them, to the IRA which is also with them. Is there a compelling reason I should do it?

Retirement, 401(k), IRAs
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4 weeks ago
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Drum roll please! And the answer is... it depends!

If your 401(k) is from a large corporation, it may have low fees and really good investment options than if you had you been with a small company. The reason is that small business owners are more concerned with keeping the company going then to spend time on making the 401(k) great. Big companies have more resources and some 401(k) plans like at Apple are really good.

I do not know your age, what income you have, nor your expenses or your family situation, so giving investment advice specific to you cannot happen.

You say your Fidelity advisor is pushing you to roll over the 401(k). So, the all-important question is “will the advisor and Fidelity benefit from the rollover?” Are you paying Fidelity to manage your IRA? If the answer is yes, then when you roll the 401(k) into the IRA, the management fee will (in most cases) be higher. This could be a reason to not roll it over!

The next question would be to review the investment options in the 401(k) and compare them to what is in your IRA accounts. Some 401(k) plans have investment options outside of Fidelity. If you were to roll the 401(k) over to an IRA, the Fidelity advisor might suggest more Fidelity funds, which could be a conflict of interest since Fidelity would benefit from more Mutual Fund fees.

After understanding a clients situation, I often suggest that those retirees that have a 401(k) via Fidelity to roll it over to an IRA so that we can have improved investment options and with lower fees than what is in the 401(k).

My advice to you would be to ask more questions and to read the following articles.

9 Considerations Before Rolling Over Your 401(k)


Busting 5 Financial Myths


Good luck!


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