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Retirement Account questions/advice needed

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Retirement Account questions/advice needed

Old 11-15-10, 02:01 PM
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Retirement Account questions/advice needed

Which fund will have the highest rate of return over the next 20 years?

Just kidding...

My real question:

Long story short, 4 or 5 years ago I left my job for a position with a start-up company. The start-up had no retirement account plan at the time but said they might in the future. I ended up rolling my fund from my previous one to an account with American Century. All was well but no additional money was going into it. After a year & half the new start-up still had nothing and no imminent plans.

So I called American Century and said I wanted to start contributing money to my account. I was told I couldn't unless I changed the account type. I said ok. All was well for the next 2 years as I contributed money in.

Well I left that employer and am now with a large company that has a savings incentive 401k program. So I called American Century to tell them to cease the auto-contributions and that I planned to roll it over. The guy tells me to check with my employer because it is an IRA Registration account now and may not be accepted. I was surprised to say the least. So I called my existing employer's program (which is administered by ING - not that that matters). They won't take that type. They'll only take 401k; 457; 403a; 403b; Roth 401k; or Conduit IRA.

American Century says they can't convert my account to any of those types and that essentially once you lose it you can't get it back (it being "rollover" type account). I'm pissed to say the least because that's a pretty big piece of info that should have been clearly stated when I changed the account type. "Happy to do this for you sir but if you do this you'll never be able to roll it over again."

So, any financial wizards out there know if this is all as is? Are there any viable options? Do I just have to contribute to my existing employer program to get the match and then roll that into my American Century account every year?

Any, non-binding, advice is appreciated.
Old 11-15-10, 02:14 PM
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Re: Retirement Account questions/advice needed

Contribute to your new 401K plan. Leave the account with American Century as they are correct and as custodian they are just following IRS rules.

Why on earth would you want to rollover from your new plan to American Century each year? That makes no sense at all.
Old 11-15-10, 02:17 PM
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Re: Retirement Account questions/advice needed

Why is it a big deal to have two accounts? Why MUST you roll your existing account into the new one, or roll the new one into the existing one? Just start contributing with the new employer and leave the old IRA account as is. FWIW, I am not sure you have any option, I don't know if you can roll a 401k for a current company out of that company's 401k while you are still working there.

I think you're seeing some magic having it all in one account, but there's no need for that, and in fact, diversifying between firms isn't necessarily a bad idea (and diversifying in your investments is a very good idea).
Old 11-15-10, 02:23 PM
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Re: Retirement Account questions/advice needed

It's not terrible to have two accounts I was just looking to combine so that the pot of money growing is consolidated/larger.

Both are in diversified funds and are performing well. The work account gained almost 15% this year and the American Century performed around 10-11%.
Old 11-15-10, 02:36 PM
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Re: Retirement Account questions/advice needed

Originally Posted by Nefarious View Post
It's not terrible to have two accounts I was just looking to combine so that the pot of money growing is consolidated/larger.
Yes but you are overlooking many of the advantages of having a 401K plan, especially if your employer matches.

In addition, if you rollover money into American Century, there it will stay due to the description in your original post. If you leave it in the 401K, it can be moved to another 401K if necessary.
Old 11-15-10, 02:39 PM
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Re: Retirement Account questions/advice needed

Originally Posted by Brian Shannon View Post
Yes but you are overlooking many of the advantages of having a 401K plan, especially if your employer matches.

In addition, if you rollover money into American Century, there it will stay due to the description in your original post. If you leave it in the 401K, it can be moved to another 401K if necessary.
Well, my thought was that I would contribute each year and wait until they deposit the matching and then roll the existing funds into the American Century. I'd keep the work one open and contribute more and keep getting the matching. But as Lurker said, that may not even be allowed.

Good point about being able to roll it over in the future, though, to another employer. Something I won't be able to do w/ the American Century account.

Thanks for the input.
Old 11-15-10, 02:45 PM
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Re: Retirement Account questions/advice needed

Good has been done here this day!
Old 11-15-10, 04:03 PM
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Re: Retirement Account questions/advice needed

But if you are able to rollover it..wouldn't your compounding interest be greater?
Old 11-15-10, 04:18 PM
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Re: Retirement Account questions/advice needed

Originally Posted by Nefarious View Post
Well, my thought was that I would contribute each year and wait until they deposit the matching and then roll the existing funds into the American Century. I'd keep the work one open and contribute more and keep getting the matching. But as Lurker said, that may not even be allowed.

Good point about being able to roll it over in the future, though, to another employer. Something I won't be able to do w/ the American Century account.

Thanks for the input.
In a really long time, when you retire, you can roll everything into one IRA, which probably gives you more options than employer plans. If you dislike American Century, you can roll out of them into another IRA, but (probably) not into an employer plan.

It might be easier to look at a single report, but multiple plans is no big deal.
Old 11-15-10, 04:38 PM
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Re: Retirement Account questions/advice needed

Originally Posted by superdeluxe View Post
But if you are able to rollover it..wouldn't your compounding interest be greater?
That was my reasoning. Doesn't sound like it will make much difference as I won't have that option.


OldDude: Not displeased with American Century. They've been good overall. Rolling into the employer plan just seemed like less hassle and it was performing well so that was why I intended to roll out of American Century to it.


I'll leave with a quote from Ryan Bingham's "Dollar a Day":

"Well I never understood why all my money
Goes down to the man at the bank
When all he does is sit and think
About the money that I'm gonna make"
Old 11-15-10, 05:01 PM
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Re: Retirement Account questions/advice needed

Originally Posted by superdeluxe View Post
But if you are able to rollover it..wouldn't your compounding interest be greater?
I don't see how. If you had $100 in ten different savings accounts, it would earn the same at $1000 in one savings account, assuming that the interest rates were the same in all the accounts.

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