First time being laid off from any job… seeking advice from people who have dealt with this already. What do you do with your 401k between your career break and enrolling in your new employer’s 401k plan? Are you keeping it in your Empower account and pay the service fee since WF won’t pay it any more? Are you rolling it over to your own IRA? If so what brokerage platform?
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Keep it with Empower until you get the new job. Some savings plans allow you to roll your money into it like the TSP for federal gov workers.
When you do move it, remember that your match from Wells is in WFC stock. You will need to decide if you want to sell on that rollover or if you want to move that portion of your account as an in-kind transfer to a traditional IRA.
Moving it fast doesn't make sense if you think you'll need to move it again. Definitely wait until you are sure you got this years match or determined if you are not eligible.
"2ftq+1pOc5rrG, you might want to verify you're eligible for the matching as I think you have to be with the company up until December 15. I don't think they prorate your time for matching purposes".
Thank you for bringing up this very important point on bonus eligibility!
You are partially correct. One exception to this hard and fast rule is in regards to retirees. If you retire at anytime within the year, the stipulation that employees must be onboard on December 15 of that year to be bonus eligible is waived.
This has been verified and is accurate. There may be other exceptions to this rule (medical, hardship, etc.) and this is as easy to verify as the retiring exception.
Happy Holidays and Investing!
2ftq+1pOc5rrG, you might want to verify you're eligible for the matching as I think you have to be with the company up until December 15. I don't think they prorate your time for matching purposes.
Be careful about all the advice submitted here.
My situation is a bit different. I am a June 2023 retiree. All of my funds are still with the WF 401K. I am very pleased with the returns I have gained over the years. I am split 50/50 with SP500 and NA100. The gains seen here over the years have been phenomenal.
True, it has not been a straight line rise to the top but nothing ever is, 2022 being an excellent example. The key is staying put and riding out the downtrends. It always recovers.
My next move is to ride the possible Goldilocks soft landing scenario in a December Santa Claus rally and on December 31 close out all positions with the WF 401K and transfer out to an advisor position, still not determined.
Big plus is retiring also allows me to grab the WF 6% matching $ on all my contributions this year up to June 30.
Happy Holidays and Investing!
"If you were younger than 59 1/2, think twice before rolling it to an IRA. An IRA requires you to be 59 1/2 to take distributions or suffer a 10% penalty."
Not Necessarily. If you are over 55, IRS rule 72-t allows you to set up an SEPP. SEPPs are substantially equal periodic payments. When you withdraw money from a qualified retirement account under Rule 72(t), the funds are distributed to you as SEPPs.
These regular payments are made over the course of five years or until you turn 59 ½.
If you were younger than 59 1/2, think twice before rolling it to an IRA. An IRA requires you to be 59 1/2 to take distributions or suffer a 10% penalty. I have not looked at our plan in a while, but I believe you can access distributions at age 55. This might be a consideration if you do not find another job right away.
You don't get your 401k if you leave. The C suite splits it up amongst themselves. Usually just pays for lunch, drinks, and tip somewhere.
I rolled mine over. They mail a check, but I used the phone app from my brokerage company (any of the big ones work, i.e. Fidelity, Vanguard, Schwabb, many others) and was able to deposit the 401k check in my traditional IRA account just by using the app and taking a photo.
If you've been with the company a long time and were doing large contributions then it's probably an awfully big check, so it's stressful enough to have them mail it to you: depositing it via phone app takes out the stress of mailing it to your brokerage company and hoping it gets there successfully.
IMO there's no reason to keep it with Empower. They're not awful, but the other options available to you are better.
Take it out via a rollover. There is zero fee* from Empower for it - and any brokerage house (even Wells own) will provide some modicum of support (even if it’s just a pdf).
- if you go with an FA, they can provide guidance as to whether you’ll be ACATing securities or liquidating and reinvesting anew. Again- assuming you’re moving everything, there’s no penalty, just greater flexibility.
This is correct, people need to read their prospectus. Typically, at the top it will tell you the dividend yield
@1ifj+1pOc5rrG The ones that are not index funds. An example:
—“Small Cap Fund” with a rapacious expense ratio of .46% (as opposed to the State Street Russell Sm Cap Indx option with a minuscule .04% expense ratio)
….et cetera. Look for the term Index in the name and go with that.
The Target Date funds are good enough for those who can’t or don’t want to compile their own mix of index funds. But the best option is sticking with the index funds.
What "actively managed junk" is available in Empower? Do you mean the target date funds?
Avoid the actively-managed junk in the Empower lineup and just stick with a mix of the index funds that is appropriate for your risk tolerance, investment objective, and time horizon. The index funds are great—very low expense ratios and they outperform the active funds over time. The dividends paid by these funds are reinvested internally, which is why you don’t see them on your statement—but the end result, including the benefits of compounding, is the same.
Correct me if I’m wrong, but the funds (eg the one that tracks the S&P 500) that contain dividend-paying stocks do pay dividends, but they’re quietly, automatically reinvested within the shares as opposed to hitting our visible 401k account activity. I believe the term for this setup is “accumulation share”. I welcome anyone chiming in.
There are certain benefits to keeping it in a 401k. You should review the differences. However, I agree with the opinion on the horrible choices under Empower.
@1vgv+1pOc5rrGFirst, you’re crazy to have $ in the ESOP fund. Second, that’s the only fund that pays a dividend. The rest don’t. Conversely, if you were in another platform with more options, and had a healthy portfolio balance, you could be making thousands monthly in dividend income from various funds and stock that pay dividends. Not sure about the uneducated here, but once I get my 401k outta wf hands, I’ll unlockenough passive income to live off with it ever dipping into my portfolio
Yes, roll it over to a mutual fund company (Vanguard, Fidelity, etc.). You can do an "in-kind" transfer of your stock and mutual funds if you don't want to sell them. At the least do an "in-kind" transfer of WF stock until you know you want to ditch it. Also, be careful about choosing to roll over to a traditional IRA vs. a Roth IRA. You may want to google the differences. If you roll to a ROTH IRA for example, you will pay income taxes at the time of the rollover to a ROTH. If you transfer to a traditional IRA, you won't. However, when you reach the age of 72, you will be required to take "required minimum distributions" from your traditional IRA based on your life expectancy. With a ROTH, you are required to take RMD's.
The initial post said “and we get no dividends”
What dividends are people referring to? According to my Empower statement, on Sep 1, 2023 i received ~$150 in dividends from the Wells Fargo ESOP Fund. So i’m very confused by the trolling back and forth from both sides. Is this the dividend people are referring to, or something else? Did i not actually get this money and the statement is incorrect? Please help me understand your guys’ argument here.
Kinda scary we work for a bank and three cats have no clue how bad the WFC funds are and lack of dividends
I would take it all dump into crypto. It’s a no-lose situation.
maybe you should contact a financial advisor instead of an anonymous layoff board.
Roll it, always roll it. Pay the fee (whatever it is). It's worth the flexibility in an IRA and easier oversight. Then if you change employers again it will be that much easier to roll over another one because you will already have the IRA setup.
Go to Schwab, Fidelity and ask them to roll over your IRA from Empovershment. Then put most in Tflo, Tbill, gold, and a money market account. The fee for doing this is to wait forever for the check from Empower. They don't do wire transfers. I don't remember any other fees. Most expenses will occur when you follow bad investment advice (cnbc, fools, etc). I follow app.hedgeye.com ... Since my layoff over 1.5 years ago returns have been 12.6% on my non-option cash, IRA's account.
Roll over to IRA. More investment choices. Simple. Period.
You guys bashing the dividend. Other firms allow investment into non mutual fund dividend paying funds and stocks. Get a clue. Or continue to accept the garbage WFC gives you.
Empower su-ks
If you have ever done a back-door Roth IRA, do not roll your 401k into a traditional IRA. If you have no idea what I'm talking about, I recommend rolling your 401k into a traditional IRA. Many more investment options and your money continues to grow. Skip rolling over to your new employer's 401k, the traditional IRA offers so many more options.
A lot of people like Vanguard for their offerings like VTI and VTO. Regardless of what brokerage you choose to roll your 401k to, you'll have plenty of low cost options.
Roll over as soon as you can. Empower is a pain in the a$$. It took me a few hours on the phone
I rolled my balance over out of Empower the day after my 60 day notice ended.
uvh+1pOc5rrG
I agree with the rollover comment. However, you have no clue how mutual funds work when you say no dividends are paid out.
Roll it over to an IRA. Who cares what the fees are. IRA will always be cheaper. You can trade individual stocks and not be beholden to the select funds in the 401k.
@uvh+1pOc5rrG I guess no one taught you how to read a prospectus.
Extra funny “We get no dividends” Do you forget to breath from time to time because your brain cells have to focus on something else like picking your nose?
I always roll mine out of my employer sponsored account when I leave. When my employment is terminated it is either by choice or as punishment. Either way I don’t want my $ providing any benefit to my former employer. And my personal accounts have always given me more and cheaper investment vehicles than any employer based options.
Besides that, in my experience, when starting with a new employer the balance of the 401k doesn’t give you any benefits so there is no upside to move a large sum into it. There are a finite set of investment options and that’s it. Conversely at outside institutions when you hit thresholds ($500k, $1mm, $5mm, etc) of holdings you get gratuities, discounts, specialized funds, etc start to open up so it pays off to consolidate a majority of your holdings to one fiduciary.
Which one basically doesn’t matter any more. E*Trade, Fidelity, Vanguard, etc are all pretty much the same these days.
Get it to a firm with better funds and investment choices asap. We are losing tons annually because of the garbage funds. And we get no dividends
How much is the service fee? I’m quitting after the bonus in 2024 and will rollover to fidelity. But am curious on high the fee is. Thanks