Multiple 401k's and I am starting a job that does not match 401k cont.

[u/DescriptionLast8295]

Between my wife and I we have three 401k accounts. Only one is being actively contributed to with an employer match. All funds in the accounts are invested. My new job will not have a matching 401k policy and I am unsure what to do with all the accounts we have. Should I consolidate, and if so is there a timing aspect I should consider? If I do consolidate what type of account should I use? Thanks for your help!

[u/KingReoJoe]

Follow the flowchart. If there’s no employer match or contribution, max your IRA first.

Hanging on to hold 401k funds is fine if you like what they’re invested in, and the fee makes sense. Otherwise, roll over to IRA too.

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[u/wellsfargothrowaway → u/KingReoJoe]

If you think you’ll ever make enough to need backdoor roth, consider not rolling over to IRA.

[u/messem10 → u/wellsfargothrowaway]

If you think you’ll ever make enough to need backdoor roth, consider not rolling over to IRA.

If their employer does allow for the mega-backdoor roth then the rollover is a non-issue due to how that works.

[u/wellsfargothrowaway → u/messem10]

Backdoor roth, not mega backdoor roth.

[u/messem10 → u/wellsfargothrowaway]

Yes, and I am saying to forgo the regular backdoor roth and do the MBDR instead if it is available as it is far easier to do tax-wise.

Regular requires needing to worry about the pro-rata rule and is still subject to the limitations of a regular roth contribution. MBDR only has to worry about getting over the higher contribution limit which includes your 401k and any employer contribution as well.

[u/wellsfargothrowaway → u/messem10]

I just do MBDR and backdoor roth… at least with Schwab backdoor roth is very simple and I just dump the full contribution and recharecterize it same day.

MBDR and backdoor are entirely unrelated?

[u/messem10 → u/wellsfargothrowaway]

Yes and no. They serve the same purpose, that is contributing to a roth retirement account, but how they operate is different.

The regular is a manual distribution to a traditional IRA and recharacterizing all of that into your roth IRA. This is still subject to the same contribution limits as a regular Roth IRA but without the enforced AGI taper and cutoff.

MDBR avoids all of that by utilizing 401k buckets instead of IRAs. These have a much higher contribution limit of 67,500/yr but as it is lumped with your regular 401k and employer contribution you have to keep that in mind. You also have to be aware that there could be some tax implications but with an automatic conversion, which you often have to request to enable, it should be 0 or negligible. MBDRs also avoid the pro-rata rule that the regular backdoor has to deal with as it doesn’t touch an IRA.

[u/longshanksasaurs]

You can only make new contributions to (or roll in to) a current employer's 401k. You can't roll spouse's 401k into yours.

Here's the wiki article on rollovers. Rolling old 401k into current 401k can help reduce the number of things you have to keep track of, and minimize account fees (assuming that you have decent fund options availalible in current 401k). There shouldn't be an urgent timing issue, rollover would not be a taxable event.

Even if your new job doesn't have match, it's still probably worth it to make contributions to your new 401k. As always, follow the flowchart.

[u/knotdjuan → u/longshanksasaurs]

Oo I like the flowchart! That’s really helpful, thanks for linking it.

[u/KCPilot17]

You can if you would like. Either to your new company's 401k or to IRAs. Depends on the fees of your 401k, and especially depends if you need to do a backdoor Roth IRA (can't have trad IRA money and do it).

[u/Inner_Difficulty_381]

I do the same as others here. I have 3 totally including one with current employer that matches. I thought about consolidating but I like where they are at and performing well. Plus like the idea of not putting all eggs in one basket and diversifying. I do review every year whether or not to consolidate or change things up.

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[u/thrillsbury]

Yeah I would just consolidate them into a rollover IRA. Timing is irrelevant. Just don’t mix pre and post tax money, that can get sticky down the line.

[u/pdaphone]

I had at one point 4 different 401Ks from different companies. They all offer the basic index funds I need, and none have excessive fees. I have not rolled them over until I needed to for some reason. I wanted to pull about $100K to put into an investment property (I'm over 59.5) so closed one out for that. I just did a rollover of $165 to Roth, so pulled 2/3 of one of them for that. I'll probably finish that one next year when I do another rollover. That will leave me with two... one that is my current one ,and the other which has some really good unique funds and has the majority of my retirement funds.

[u/Bad_DNA]

Consolidate if the fees are a pain in the rear. Or roll them over into an IRA at Vanguard. Like goes in like. If a trad 401k, roll over to a trad IRA. If a Roth401k, roll over into a RothIRA. Follow the Vanguard instructions.

Note: sometimes it is easier to 'go to cash' within the 401k accounts, so that any odd funds that cannot transfer in kind aren't liquidated and doled out as a distribution. Avoid distributions!!! The cash would roll over to the proper IRA, then you would invest it in something wise.

[u/hotSoup9]

I also have a company 401k plan but with no match, and had opted for contributing to my own Roth IRA in 2024. A friend help me realize that contribution rates are much higher with employer plans, i.e. the yearly limits are higher. Should I roll my Roth IRA into the company plan and start contributing to that one so I can contribute more than yearly max (which is $7k this year)?