Should I roll my 401K from my soon-to-be previous employer into a traditional IRA?

I am leaving my current employer in the next few days. Should I roll my 401K and pension fund from my soon-to-be previous employer into a traditional IRA?

My new employer offers 401K that matches up to the first 5% and allows me to roll my previous 401K into theirs. Should I do that, instead? According to the benefits literature from my new employer, my 401K with my new employer will be fully vested after my 4th anniversary there. Will I lose any value in my existing 401K by rolling mine into theirs if I leave my new employer before my 4th anniversary?

By rolling your previous 401k into a traditional IRA, you then gain complete control over your investments. With a 401k you get to choose only among the limited choices provided by the plan. There is no tax consequenses of rolling into a traditional IRA. Just make sure the roll over is directly from the 401k to the IRA and does not pass through your hands. I say complete control but that is not exactly correct. If you were to roll into an IRA provided by a mutual fund company you would have selections of only their funds. If you roll to an on line stock broker account your options would be much broader but there still may be limits imposed because they may wish to charge you for investing in certain mutual funds. Life is not easy.

You should probably roll over into the new 401(k), if only for tax purposes . Vesting should only affect the sums earned at your new employer but you may want to call their financial services provider to check.

Absolutely!
I recommend staying away from brokers. Get with a no load fund family. Some good houses are Fidelity, Gabelli, and,Vanguard.
I would not want my money in my former employers control for one day. There are favorable tax and inheritance issues with and IRA over a 401K. My employer has a very good 401K but my money at Gabelli far out preforms my employers 401K plan year in and year out. Your former employer could change the plan, freeze the assets and in some cases take the money (although they have gone to prison for it).
Do some homework.

Roll it into your new employer's 401k. You wont lose anything, as long as you do a direcr rollover. And if you decide to leave your new employer before you're vested you should be able to take your contributions with you. The match is like free money. No one matches your IRA and the contribution limits for a 401k are a lot more than for an IRA. Start an IRA with your own money if you can. Also if you roll money into an IRA from a 401k, and then contribute to it, you lose the opportunity to roll it into another 401K.

There are benefits to doing either of the options. However, if you roll the previous 401(k) into an IRA, that gives you two investment accounts to monitor. If the fund line-up in the new 401(k) is good, which in most cases it is well diversified, rolling your previous money into the new 401(k) is going to be your best bet.

You will not lose any vesting in your previous plan. In addition, you will gain flexibility by keeping your money in a 401(k). While employed, you have the ability to take loans (not always recommended) out on your money. If you were to roll it into an IRA, you would lose that ability.

Ron, ChFC

IMO, roll your money into a Traditional IRA because you can choose which firm to use.

Money that is rolled over is always yours, fully vested. Your new employer's vesting schedule only applies to their co-contributions. Any money you contribute directly or through a rollover (plus any earnings from this) is always yours, no matter what. At least, this is how it SHOULD be.

Not to procrastinate, but I would leave the fund alone for a month or two in case some additional transactions may take place in your benefit.

As for rolling over the funds into another 401k fund as opposed to a traditional IRA, I would look to get advice from both the company handling the future 401k and another third-party company. It's amazing the fees and other unexpected whatnot firms can throw into the mix which can cost you dearly.

It's also important to rollover the old 401k into something eventually because the fees they will charge after you leave the firm is usually double (or more) than before.

In addition, this aspect of career changing helps to divest your worth in case of dire circumstances. I have to admit I have job hopped a little, and now I have a fair diverse portfolio because of what has been gathered. Now dips in NASDAQ or NYSE market, may or MAY NOT affect my portfolio because I don't have all my eggs in one basket. I have rolled over all of my previous 401k's into a different traditional IRA each time and it does make for a diverse portfolio.

Only the matches from the new employer are not vested until your 4th anniversary. The rollover and your contributions are vested immediately. You will not lose anything from your existing 401K because of leaving the new employer. You may lose part or all of the matches from the new employer if you leave.

Whether or not you leave the new employer, you also may lose something from the existing 401K if you are not yet fully vested in the old 401K, but this is not affected by whether you leave the new employer.

As far as I know, employers only match new contributions, not rollovers. Do not expect a 5% match on the rollover unless you have been told that your new employer matches rollovers.