Realigning vs. Transferring 401k Balances
- You may have significant account changes with a new 401k plan.computers screen 2 image by chrisharvey from Fotolia.com
Transferring a 401k involves analyzing new investment options. You'll also need to become comfortable with a new provider's statements and online tools. - Mutual fund trades usually execute in one day.calendar with bow image by Photoeyes from Fotolia.com
Mutual fund trade settlement takes one day in most 401k programs, although legally can take up to three days. Transferring funds to a new provider may take from several days to many weeks to complete. - New 401k plans may be better or worse than current options.pie chart 1 image by jovica antoski from Fotolia.com
Investment options in a new 401k plan may be more or less well rounded than the current set of options. Independent rating sites such as Morningstar can help investors analyze fund choices to discern which has better investments for their goals. - Funds may charge large fees.money in hand image by PaulPaladin from Fotolia.com
Fees for account transfers, trading and internal management fees all detract from investment results. A wide range of investments does not mean better investments. - A separate 401k firm usually handles the plan specifics.A businessman an businesswoman shaking hands image by sumos from Fotolia.com
Although some investors dislike an old employer and want to transfer funds, rarely does an employer manage a 401k plan. These are usually delegated to an outside firm with little input from an employer.
