If their inflation prediction is accurate, you still need to add in the .40 fixed rate. I saw an article a few days ago and some guy was thinking the fixed rate might go up to .60. Not a huge difference, but I guess every bit helps. FWIW.

Yeah I could potentially see buying a new bond after May reset if it gets 0.60%, but my no fixed rate bond is probably going to be pulled late this year (it is ~1 year right now, but getting the 6.4% for 6 months is acceptable I think).

LMCane said:

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txaggieacct85 said:

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" already have three different corporate 401K plus private brokerage"

Not exactly sure what you mean here, but you can consolidate IRAs into one account as long as they are the same type of IRA.

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Hmm.. not sure they are general IRA that can be rolled.

one is my current company in a Schwab account

one is when I was a contractor which is linked to my Fidelity account

the largest is the United Technologies Corp (Raytheon now) which is it's own standalone corporate 401K

to my thinking, it's not a bad thing to be diversified even with 401K providers in case one hits an iceberg.

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The Fidelity account and the Raytheon account should be able to be consolidated.

If you are no longer working for the company the 401k was with, there's really not a good reason to leave them there instead of consolidating into an IRA:

-401k plans have significantly fewer investment options
-401k plans have notoriously high fees
-and then you have the pros of using an IRA

Theoretically if you keep them separate, you could end up transferring a rollover IRA back into a 401k. And while for me, and you, that's not something we'd ever plan on doing, there are some advantages to 401k over IRA:

- retirement at 55 instead of 59.5
- better lawsuit protection
- 401k loans

While I don't ever plan on rolling the money back, I do wish I had known about this before I commingled my funds and eliminated the option entirely.

You could theoretically get the best of both worlds by transferring 401k funds to a separate rollover IRA while you're young, but then transfer them back to a 401k when you're nearing retirement age (or if God-forbid you need to take a loan).

"there's really not a good reason to leave them there instead of consolidating into an IRA:"

In addition to access to your money at 55 if you retire early as deadbq noted, rolling it into an IRA also takes backdoor Roth IRA's basically off the table because of the tax treatment of the backdoor rollover if you have a balance in your IRA.

deadbq03 said:

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Theoretically if you keep them separate, you could end up transferring a rollover IRA back into a 401k. And while for me, and you, that's not something we'd ever plan on doing, there are some advantages to 401k over IRA:

- retirement at 55 instead of 59.5
- better lawsuit protection
- 401k loans

While I don't ever plan on rolling the money back, I do wish I had known about this before I commingled my funds and eliminated the option entirely.

You could theoretically get the best of both worlds by transferring 401k funds to a separate rollover IRA while you're young, but then transfer them back to a 401k when you're nearing retirement age (or if God-forbid you need to take a loan).

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While the bullet points you listed are technically true, they are special circumstances that contain their own specific caveats and conditions.

-If you are successful enough to retire at 55, I sure hope you aren't withdrawing your pre-tax savings versus your taxable investments.

-hopefully you've done your estate planning

-if you've left your employer that offered the 401k plan, they can deny your request for a loan since they can no longer deduct from a paycheck they used to give you.

The pros of rolling into an IRA vastly outweigh the cons for 99% of individuals.

BDJ_AG said:

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"there's really not a good reason to leave them there instead of consolidating into an IRA:"

In addition to access to your money at 55 if you retire early as deadbq noted, rolling it into an IRA also takes backdoor Roth IRA's basically off the table because of the tax treatment of the backdoor rollover if you have a balance in your IRA.

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It does not take backdoors off the table.

Good Poster said:

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BDJ_AG said:

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"there's really not a good reason to leave them there instead of consolidating into an IRA:"

In addition to access to your money at 55 if you retire early as deadbq noted, rolling it into an IRA also takes backdoor Roth IRA's basically off the table because of the tax treatment of the backdoor rollover if you have a balance in your IRA.

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It does not take backdoors off the table.

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It effectively does due to the pro rata rule making the tax hit huge.

P.H. Dexippus said:

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Good Poster said:

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BDJ_AG said:

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"there's really not a good reason to leave them there instead of consolidating into an IRA:"

In addition to access to your money at 55 if you retire early as deadbq noted, rolling it into an IRA also takes backdoor Roth IRA's basically off the table because of the tax treatment of the backdoor rollover if you have a balance in your IRA.

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It does not take backdoors off the table.

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It effectively does due to the pro rata rule making the tax hit huge.

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A competent financial planner could solve this. But again to my original point, for 99% of individuals, rolling 401k's into IRA's is the move. While there are technically some "pros" to keeping it in a 401k, the pros of the IRA win for the majority of people.

Not entirely, but you will pay a pro-rata tax on your traditional IRA balance (in this case funded by a pre-tax 401k transfer). And no you can't have a separate IRA for backdoor Roth's to get around that rule. The IRS views all IRA accounts as one bucket.

Since you are paying that pro-rata tax, the backdoor Roth becomes significantly less appealing.

BDJ_AG said:

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Not entirely, but you will pay a pro-rata tax on your traditional IRA balance (in this case funded by a pre-tax 401k transfer). And no you can't have a separate IRA for backdoor Roth's to get around that rule. The IRS views all IRA accounts as one bucket.

Since you are paying that pro-rata tax, the backdoor Roth becomes significantly less appealing.

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Yes, I know the rules. My original point still stands.

deadbq03 said:

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Theoretically if you keep them separate, you could end up transferring a rollover IRA back into a 401k. And while for me, and you, that's not something we'd ever plan on doing, there are some advantages to 401k over IRA:

- retirement at 55 instead of 59.5
- better lawsuit protection
- 401k loans

While I don't ever plan on rolling the money back, I do wish I had known about this before I commingled my funds and eliminated the option entirely.

You could theoretically get the best of both worlds by transferring 401k funds to a separate rollover IRA while you're young, but then transfer them back to a 401k when you're nearing retirement age (or if God-forbid you need to take a loan).

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great advice but too confusing for me.

I have rolled over some previous corporate 401K into the Raytheon 401K and I have researched it pretty significantly to check the fee structure and overall reputation of the fund.

in my mind it's a good idea to have corporate 401K, private Fidelity 401k, private Fidelity brokerage, cash, bitcoin, treasury bonds, schwab 401K.

maybe I will look into setting up ANOTHER IRA from my current company? is it possible to do that?

also to the points made above- it is correct that the main corporate 401K I have has limited investment options.

but my current corporate 401K run by Schwab allows me to make a massive number of choices of different funds to invest in.

I'm not sure why it is so much better, but it really allows you to be as diversified as you want to.

LMCane said:

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also to the points made above- it is correct that the main corporate 401K I have has limited investment options.

but my current corporate 401K run by Schwab allows me to make a massive number of choices of different funds to invest in.

I'm not sure why it is so much better, but it really allows you to be as diversified as you want to.

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Most 401k plans have about two dozen investment fund options (not including target date funds).

IRA's have essentially limitless investment options.