I have 401k with my last job and right now it’s down 11% in the stock market. I want to roll it over to fidelity to be in my new 401k at my job but I don’t want to lose $500 bucks doing it. If you do a rollover/transfer when its down, will you lose money in the transfer process?
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Little confused by this. Why would you lose $500? Is it because of some sort of transfer fee or is the 11% loss the $500?
I’m not sure if I would lose money or not. The account right now has like $3500 in it and it’s down 11% in the market. If I roll it over when its down to another account, like another target date fund from fidelity, will I end up losing money by doing the rollover? I don’t know how that works since I thought you had to sell the shares in that fund to roll it over and by doing that you would lose money then, right?
A rollover from one administrator to another is free I believe. I’ve never done it though i just recently started a new job so I’m about to find out myself.
Here’s a link that could hopefully be helpful.
I’m sure someone from PFC staff will add more clarity.
Thanks Chris!!
Alex,
When doing a rollover, your money IS out of the market for some time… maybe a week or two. It all depends on what happens during that time, which is impossible to predict. If it goes up, you will lose some shares, but if it goes down, you will gain some shares. If it stays the same, you will not lose anything. Hope that makes sense!
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So every time you switch 401ks when you leave an employer, you have the risk of losing a lot of money in the rollover process if the market fluctuates in the 2 week period it takes to do the rollover?
With ADP, I have to pull the money out in a check and then mail it to fidelity which means it could take a few weeks to do this. I could lose 10% or something out of my 401k from ADP if the market goes back up during this time. However, I don’t want a 401k account by itself for every job that I get in the future and have 5 different 401ks. I would want all of them in one account so I can accrue more compound interest.
Am I understanding this right?
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You’re thinking pennies over dollars. If you put the money back in your portfolio will grow. 2 weeks over 40+ years makes little difference. Invest for the long term.
You can’t control what the market does, you can control how long you’re in the market. The 2 werks isn’t worth stressing over.
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I am putting it back into a portfolio in my new 401k as soon as the rollover clears, but I don’t want to lose $500 bucks transferring it if the market is down.
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Like @Chadmethner said, you’re thinking pennies over dollars. If your account is $3500, you won’t gain/lose $500 in a couple of weeks. Think long-term with your move.
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Maybe Im just confused on how it works, here is a screenshot of what it looks like in my account.
I had $4240 in there originally, the market value change is down 14%. If I try to rollover the money right now, they will write me a check and mail it to me so I can then transfer it to fidelity. However, since it can take a couple weeks for this to happen, won’t I lose $607 bucks because I’m taking it out of the market?
Hi Alex, let’s say you initially bought 42 shares for $100 each = $4200. But the market went down so the share price is now $85.71 and your 42 shares are now worth ~$3600.
When you cash out your check for $3600, we will assume that the share price doesn’t change much after two weeks and is still $85.71. When you transfer it to Fidelity, you would still be buying 42 shares for $85.71 and technically still down $600, and things won’t be different than how they were in your original account. You’ve lost $600 whether you transfer the money or not and the only way you would lose more is if the market drops during those two weeks.
Hope that makes sense!
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Hey Vivi, I got it, makes sense now, thanks everyone.
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