I’ll write more in the next few posts about my job and my decision to leave, but in the first post since my decision to take a hiatus from blogging, I’ll write about a financial consideration of leaving…My blog is supposed to be a “PF Blog” ya know. It’s in typical freedumb fashion…discombobulated and very short on details. Too bad, I’m just getting warmed up.
So, to leave my money in my company’s 401k or roll it over. I believe there isn’t one “best choice.” It’s different depending on your company’s 401k offerings and your personal taste for managing your own money.
In my situation, I don’t want to “actively manage” my money too much. I thought about it…I really don’t have the expertise or the motivation to manage almost $90k of my own money. You can probably tell where I’m heading in terms of whether I rolled over or not.
But on the flip side, having so much control over my money is also alluring. I want to buy 100,000 shares of that penny stock…Sure why not! Uhhh yeah, 
My ex-employer’s 401k offerings are not bad…So I’ve decided to leave it there. The options afforded to me are not all that bad, easy access via a website to manage it, and ultimately, it’s much more simple.
Item number 1, Leaving My Money, CHECK. What do you think? Roll it over or leave it.
BTW, I want to thank everyone that’s posted comments or sent me emails…I’m going to try my best to sift through all those comments and respond.
pfstock
January 1, 2007 at 2:10 pm
I agree that this is a personal choice to either leave your funds in a 401(k) or roll it over to an IRA. I still have funds in 401(k) plans at three previous employers. I wanted to bring up a couple other points.
First, there is preferential tax treatment for company stock shares that are held in a 401(k), but not for the same shares in a rollover IRA.
I’m not sure if this is still true, but 401(k) plans are qualified plans that afford you greater legal protections than a rollover IRA. Of course, this only comes into play if you are sued later in life.
And I guess that, like you, I didn’t want the extra responsibility of managing a sizable chunk of money. Two of my three plans offer something known as Financial Engines which helps to simplify asset allocation and re-balancing.
In any case, good luck in your new endeavor. You can still roll over your 401(k) later, if you change your mind.
mapgirl
January 1, 2007 at 2:46 pm
I like rolling it over so you can retain control over it. Plus if you roll it over with the same place, you get the same options as before, plus whatever else the company offers, and then you aren’t limited in your fund choices to the original plan. Then it’s like leaving it, but better.
I did that with my last company because I really liked the plan administering company. I almost kept it in the plan out of laziness, but I figured if I controlled it by rolling it over, I wouldn’t get kicked out suddenly for a low-balance, etc.
Matt
January 2, 2007 at 6:42 am
If the 401K plan at your previous employer was something you were happy with and could leave pretty much alone then that’s a good place to keep it. I’ve got money in my previous employers plans, it works for me and the funds are doing well.
Congrats on leaving the job, its a tough choice sometimes.
freedumb
January 2, 2007 at 9:24 am
pfstock, interesting. I actually had a hunch that there were some benefits to keeping it in the 401k. On top of what you mentioned, I figured that since the company sponsors the 401k for active employees, I would get the low admin costs afforded to them as well. I didn’t know about the legal protections though…I’ll look into it more.
mapgirl, for some reason, having control of my cash makes it feel as if it really is my cash more. It shouldn’t, but it does.
Matt, I really do like my previous employer’s 401k. It’s got a good, easy system to balance funds and gives me ops to purchase company stock. Congrats to you too on taking the leap and leaving your old employer. I know what you mean about the sizeable pay cut.
Tai
February 15, 2007 at 10:43 pm
Maybe you should roll your 90k over to a roth ira because it allows you to withdraw from it taxfree and i think penalty free. Um, that way you can use a percentage of that money to invest into some high yielding cds, bonds..etc..it might be good to throw some money in the stock market..i mean, SOME, not all while some stocks are low-they might go back up…or they may plummet..if you’re willing to take that risk. Hey, it’s better than going to Vegas and bottoming out. Hopefully you like this response =)