I’m pretty certain my days are numbered here due to location strategy. I’m curious as to what others have done with their 401k accounts. Did you just leave it with empower? Is there a better way to manage it? I’m close to retirement anyway and I doubt I’ll have a new employer to roll my plan into.
19 replies (most recent on top)
Empower and prior wf managed 401k is garbage. Once you can move it out, do so.
If you are close to retirement you should have a financial advisor you work with. I have been transferring out of my 401k to a managed IRA for years. My FA is able to do much more for me than Empower can.
I left WF in February and have decided to leave my 401k there with Empower for now. There’s a good selection of low-cost index funds that make for the simple bedrock investments you want in a retirement portfolio. I engage in more specialized investing in my brokerage accounts.
I rolled mine over to another entity. Still collecting severance pay so haven’t had to touch it yet.
Regardless of fees or options available (unless you have some legacy spectacular options), ALWAYS roll it out of an Employer Sponsored plan when terminated.
The more participants in a plan the better the results for an employer. And typically those benefits are passed to the ultra high earner employees vs the rank and file. Think means testing, direct employer contributions, etc at lower costs because of the participation.
As others said, if you’re younger than 59 1/2 and 55 or older you can draw against the 401k without penalty. You’ll pay taxes on pretax account withdrawals.
If you’re 59 1/2 or older then roll it over to an IRA like Fidelity or TD ameritrade etc. don’t leave it there unless you have to.
And even if went to a new employer you’d want to roll it over to an IRA. That way it’s in your account on your own chosen IRA vs some 401k administrator.
"It’s called the Rule of 55. Must leave 401K in tact to access funds to avoid tax penalty and retire early at age 55 - 59 1/2. Check it out IRS.gov."
Yes! I am 58 and employed 72t to provide equal distributions until I am 62-ish.
you can live off your investments before 59 1/2.
It’s called the Rule of 55. Must leave 401K in tact to access funds to avoid tax penalty and retire early at age 55 - 59 1/2. Check it out IRS.gov.
Roll it over to Vanguard or Fidelity.
they have better investment options and lower fees.
don't leave it here for any reason.
Well's leadership selected empower to take over the 401k.
Same Id--ts who brought you RTO and location strategy.
Do I need to say more??
https://www.irs.gov/retirement-plans/substantially-equal-periodic-payments
I tapped into mine at 56 after losing my job, you must keep the account with the account holder and ensure they can do withdrawals. No penalty. You can even open a new 401k at your new employer. I am now 61 and it wasn’t that hard. Might not be the best option, but it’s out there (go to irs.gov if you do not believe it).
"The 10% penalty goes away once you are 59 1/2 (NOT 55). Look it up!"
sigh.
no, this is not true. there are ways.
anyone listening to this fool deserves to lose their money. this simple-minded imbecile knows nothing.
ignore them and consult a professional on what to do next.
It's actually easy as pie to rollover to Fidelity or another financial institution.
First: set up a traditional IRA account at "new" institution.
Second: Contact EMPOWER and they will rollover it over for you to "new" institution. Ask that they transfer "in kind" - they'll know what you mean. Transferring what you have directly.
The penalty for taking money into your own hands is 10% plus state and federal taxes.
The 10% penalty goes away once you are 59 1/2 (NOT 55). Look it up!
If at least 55, you can take penalty-free withdrawals after you are separated if you need to. An option. I did that, but I had a pension that was kicking in at age 60 from state government (I only worked at Wells for 7 years; previous state gov employee). Read all the ins and outs of it, but it worked for me and helped my overall income after leaving WF (I did get another job but lost about 1/3 of my salary).
rollover into a IRA. A rollover is a trustee to trustee transfer... It is NOT a withdraw! The other trustee can be fidelity, scwhab, etrade/Morgan stanley, chase. Once it is in your IRA you have a lot more control.
I rolled mine over to a Vanguard IRA the day after my 60 day noticed ended.
If you are 55-59.5, then you need to read up on SEPP withdrawals before making the decision to roll to an IRA. Leaving the money in employer 401K may be to your advantage to avoid the early withdrawal penalties. It’s too complicated to get into on this board, but you should research this before taking any action.
You can leave it there, rollover to a traditional IRA or rollover to new employer 401k plan. Depending on your salary, you may not want to roll over to a traditional IRA but rolling over to Roth has tax implications.
You can roll it over to Fidelity (or another financial institution). Rollover your Wells Stock (and mutual funds) "in kind" so your shares in investments rollover over to what you have and aren't transferred to money market.
More investment options and guidance at fidelity and LOW fees.