3 old accounts just sitting

Investing
#1

Hello

I am in need of some advice. I have three old 403 accounts from different brokers (2 Fidelity and 1 Vanguard) totaling over 300K. I am starting a new job that has a different broker, Transamerica, and I’m not sure of what the best use of my old accounts. Should roll all three accounts to Transamerica? I know I need to open a Roth IRA but that’s only 6K/year. Any other options after opening the Roth? I just want to ensure I am making the most use of my money. Thanks for any responses

#2

Hi,
It is usually a good idea to consolidate the money in those 3 accounts. You can either move the money over to your current Transamerica 403b OR roll it over to a rollover IRA.

Why you would do a rollover IRA:

  • You can choose any brokerage you want, with more investment options and probably lower fees. You can also move money from a rollover IRA to a 403b in the future.

Why you would roll it over to your current 403b:

  • If you plan to do a backdoor Roth, it is preferred to take this route to avoid the pro-rata rule. Not all employer-sponsored retirement plans allow for this.

Why you would do nothing and keep the old accounts:

  • You plan to do a backdoor Roth IRA AND you are not allowed to rollover money to your current 403b.

That’s the gist of it, but there might be other things to take into consideration. It’s overly complicated in my opinion, but I hope that helps!
Check out this article: Four reasons to rollover your old 401(k)s – Personal Finance Club

#3

Thanks, Vivitron for your response. For some reason I thought I could not open an IRA if my job offers a retirement plan. I will check out the article as well thank you!

#4

No problem! You can totally open an IRA if your job offers a retirement plan, the two are totally separate! :slight_smile:

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#5

I agree with vivitron! You can open a Rollover IRA with Fidelity and roll those old accounts into that one and pick from thousands of index funds. Then, with the same account, you can open a Roth IRA to deposit $6k/yr in if you make less than the allowable income levels. Both of those would be shown on your same Fidelity login and you can manage them in one place and then deal with your Transamerica account on the side. My wife’s company uses Transamerica too so she has this exact same setup.

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#6

Thank you ICJones for responding. This info has given me more clarity on my situation. I’m going to get started on this ASAP!