What IRA Should I Roll My 401k Into?
Changing jobs frequently could leave you with multiple 401(k) accounts from previous employers, making it hard to track all your savings for retirement. Converting these funds to either a traditional or Roth IRA could help lower fees while simplifying how you monitor them.
IRAs also provide access to a wider selection of investments than is found in most 401(k) plans, making them an excellent way to diversify your retirement savings portfolio. We’ve listed our top choices for rolling over your 401k:
Vanguard provides investors with more investment choices than many 401(k) plans do, enabling them to select from an extensive array of funds available on the market. As an IRA offers unrestricted investment possibilities, this makes Vanguard an excellent option for investors seeking a flexible IRA solution.
Vanguard charges some of the lowest fees on its mutual fund investments and ETFs – this is particularly significant given some 401(k) plans’ high expense ratios.
Vanguard also provides various tools that can assist investors with researching and tracking their investments, including side-by-side fund comparisons and historical charts. Their automated financial planner can track your entire portfolio across brokerages as well as recommend ways to help reach your goals more quickly.
Fidelity is a favorite among investors who value in-depth research and an intuitive platform that supports mindful investing. Their stock, ETF and mutual fund screeners are easy to use and set the industry standard across an array of criteria. Users also get access to third-party research reports; Fidelity Viewpoints news feed provides personalized analysis on market movements with particular attention paid to social, international and political events that could impact trading activity.
Fidelity’s mobile app stands out as an exceptional offering, featuring an easy interface and the capability of scanning documents directly into an account. Customers with multiple accounts across different firms may appreciate how easy Fidelity makes consolidating and managing those holdings from one app, including required minimum distribution (RMD) calculations and reporting. Furthermore, Fidelity offers an array of fixed income investments ranging from international bond funds to certificates of deposit as well as traditional IRAs, rollover IRAs, custodial accounts, and 529 accounts.
3. TD Ameritrade
A TD Ameritrade IRA is one of the best brokerage accounts to transfer your 401(k). They have no commission fees and an extensive selection of exchange-traded funds and mutual funds with no transaction fees, along with extensive online research capabilities.
ResearchTeam reports, stock scanners in Thinkorswim and Market Edge on CNBC are just a few tools TD Ameritrade offers as part of its suite of tools for market analysis and commentary.
Unfortunately, in 2007, this company experienced a major hack that affected millions of customers and has struggled since to rebuild trust with customers. If security is an issue for you, an alternative might be opening an account with one of their competitors instead – choosing a bank, brokerage firm or online investing platform and then informing them you want to move your 401(k) money over will usually result in instructions on how to do this process.
Wealthfront is an award-winning robo-advisor that’s ideal for those who wish to transition their 401(k)s into IRAs and manage all their investments through one company. Based out of Palo Alto, this firm currently manages $27 billion across 470,000 accounts with custom diversified portfolios tailored specifically for your risk tolerance rebalanced automatically to keep you on the right path towards your financial goals.
Wealthfront provides an effortless setup process and asks simple questions that help determine your risk tolerance before creating a portfolio. Furthermore, Wealthfront’s automated management algorithm maximizes gains through tax loss harvesting–selling losing stocks to offset any taxable gains–an effective and time-tested strategy.
Personal Capital offers DIY investors more control in selecting portfolios and ETFs to suit their personal investing preferences, but lacks access to human advisors like Betterment and Ellevest do. Instead, its helpful Help Center covers frequently asked questions with answers as well as comprehensive articles.
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